Hudson Pacific Properties is trimming its holdings in the Los Angeles region with a property sale near its West Los Angeles headquarters.
The firm sold Element L.A., a 12-acre, 284,000-square-foot office campus at 12333 West Olympic Boulevard in Sawtelle, for $150 million. It also received a separate $81 million payment to terminate the existing lease, and transfer taxes for the sale were paid by the buyer, longtime tenant Riot Games.
Hudson Pacific is using part of the $231 million total proceeds from the sale to repay $206 million of commercial mortgage-backed securities debt tied to the property. The seller acquired the location for $101 million over a decade ago and turned it into a creative office campus, landing video game giant Riot Games as a tenant.
Element L.A. consists of five buildings spread across its 12 acres, with the centerpiece being a 167,000-square-foot building with skylights and industrial windows. When Riot Games was preparing to move more than 1,000 of its employees to the office campus a decade ago, monthly rent was set at $3.75 per square foot, the Los Angeles Times reported at the time.
In selling the Element L.A. complex, Hudson Pacific is “realizing the value” it has created at the site through its “transformation and full stabilization” of the asset, Hudson Pacific CEO Victor Coleman said in a statement.
The firm plans to reinvest, especially in the Bay area and Seattle, “where we’re seeing the strongest leasing momentum,” Coleman said. Hudson Pacific recently revised its outlook to reflect a 1-for-7 reverse stock split that went into effect Dec. 1.
Los Angeles’ office market has been marked by distress, particularly in downtown L.A., where Brookfield has let multiple buildings go back to lenders.
Many offices have been trading for office-to-residential conversions or redevelopments, such as Irvine Company’s plan for 700 units replacing an office building in Newport Beach, near John Wayne Airport.