Kilroy settles with AT&T over DirecTV HQ in El Segundo

Kilroy Realty has agreed to settle a lawsuit with AT&T over DirecTV’s headquarters in El Segundo, about 10 days before trial was set to start, court records show.

In April last year, DirecTV’s former parent company AT&T sued Kilroy to get out of five full floors of the office building at 2250 East Imperial Highway, plus parts of the second and third floors. In total, the firm wanted out of about 150,000 square feet of space, Kilroy said on an earnings call last year.

Kilroy argued the firm could not contractually vacate the offices before the end of the year, records from L.A. Superior Court show.

After the suit was filed, DirecTV put about 500,000 square feet of space across Swift Real Estate’s 2200 and 2230 East Imperial Highway and Kilroy’s 2250 East Imperial Highway in El Segundo on the market for sublease.

Terms of the settlement were not disclosed, though DirecTV has significantly reduced the amount of space it has put up for sublease, according to a source familiar with the matter. Kilroy and AT&T’s tentative settlement still must be approved by the court.

Neither Kilroy nor DirecTV responded to requests for comment.

DirecTV took about 400,000 square feet off the market and is now only marketing about 101,000 square feet at Kilroy’s 2250 East Imperial Highway for sublease, according to CBRE marketing materials obtained by TRD.

DirecTV is asking about $1.95 per square foot a month, the marketing materials state.

According to court filings, AT&T said it was paying base rents of $3.39 per square foot at DirecTV’s space at 2250 East Imperial Highway — significantly more than DirecTV’s current asking price.

Space available for sublease continues to rise in Los Angeles, increasing to almost 10 million square feet in the third quarter, according to CBRE. More than 950,000 square feet was put on the market for sublease from July through September.

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