Yahoo! Makes Big Splash in Santa Monica

New Yahoo Center

   Yahoo!, long a formidable presence on the internet, is now a formidable presence in Santa Monica.
   Last week, Yahoo! signed a 229,728–square-foot lease with Equity Office to house the internet company’s media group at Colorado Center in Santa Monica. As part of the transaction, Equity Office is renaming the office complex “Yahoo! Center.”
   Yahoo! will initially occupy 64,671 square feet and expand to 229,728 square feet by 2008.
   The internet giant is establishing a “center of excellence” in Santa Monica under the umbrella of the Yahoo! Media Group, as part of a broader strategy to expand its investment in the future of online media and content. The group, headed by Lloyd Braun, includes Yahoo!’s movies, TV, entertainment, music, games, finance, news and weather, sports, health and youth businesses.
   “By having a stronger presence in Los Angeles, Yahoo! is uniquely positioned to develop a comprehensive, integrated approach to online content opportunities, establish stronger relationships with the media community, and attract the best and brightest talent,” Braun said.
   Equity Office acquired the 1.1-million-square-foot office complex that is bounded by Colorado Avenue, Broadway, Cloverfield, and 26th Street for $443.6 million in July 2004 in a joint venture with TIAA-CREF. In its first six months of ownership, Equity Office has raised the occupancy at the property from 74 percent to approximately 97 percent leased with the Yahoo! lease transaction.
   The Yahoo! deal is one of the largest leases in the past 12 months in Santa Monica.
   “We’re thrilled to welcome Yahoo! to an already prestigious roster of companies located at the property. Yahoo!’s presence…is a good fit with our existing customer base, and we expect this property to remain a landmark within our Westside portfolio,” said Bert Dezzutti, senior vice president of Equity Office’s Los Angeles region, which currently owns 2.8 million square feet of Santa Monica’s 7.8-million-square-foot office market. “The lease reinforces our decision to acquire the property and add upside value through a leasing program designed to target the premiere companies in the media, technology and entertainment industries. When we acquired the property, we were confident we’d be able to attract new companies, as well as accommodate the growth needs of existing companies.”
   CRESA Partners brokers Gerald Porter, Matthew Miller, Tom McGovern, and Stephen Polito represented Yahoo! in the transaction. Equity Office was represented by the leasing team of Brendan McCracken, managing director of leasing, and Andrew Goodman, leasing representative.
   “We’ve built a strong presence in one of the most desirable markets in Southern California. At the same time, we’ve created a portfolio that offers companies high-quality office spaces across a range of price points,” said McCracken. “Yahoo! Center is one of the most prestigious business addresses on the Westside. That status is further elevated by such recognized companies as CBS, HBO, MGM, Rubin Postaer, and Symantec electing to locate operations there.”
   The six-building Yahoo! Center is located in the heart of what real estate firms have dubbed Santa Monica’s “Media District” and features a health and fitness center, a lap pool, shops, a child care center, coffee shops and food court. A recently rehabbed 3.5-acre public park with basketball, tennis and racquetball courts, a playground and a reflecting pond is located on the premises.
   TIAA-CREF is a national financial services group of companies and the leading provider of retirement services in the academic, research, medical and cultural fields. With more than $325 billion in combined assets under management, TIAA-CREF ranks 68th on Fortune magazine's list of largest companies (April 2004).
   Equity Office Properties Trust (NYSE:EOP), operating through its various subsidiaries and affiliates, is the nation's largest publicly held office building owner and manager with a portfolio of 707 buildings comprising 125.7 million square feet in 18 states and the District of Columbia. Equity Office has an ownership presence in 27 Metropolitan Statistical Areas (MSAs) and in 125 submarkets.