A property in Playa Vista that was fully leased to advertising company IPG was recently sold for roughly $24.7 million, or around $510 per square foot. Newmark listed the 48,412-square-foot asset, located at 12901 Jefferson Blvd., alongside an adjacent 132,000-square-foot property at 5340 Alla Road, which also sold recently for $50.3 million.
The Jefferson Boulevard building was owned by an entity linked to LaSalle Investment Management, which acquired the property in 2017 for $45 million, or about $929 per square foot. Constructed in 1969, the two-story building received a complete redesign from architecture firm HLW in 2017.
The building, fully leased to IPG through 2028, serves as the headquarters space for IPG brands Deutsch LA and Steelhead. According to the marketing documents and The Registry’s previous reporting, the lease features three percent annual increases and one five-year extension option.
The property is located in the Silicon Beach submarket in Los Angeles, home to numerous large tech and media companies like Yahoo, Microsoft, and Crexi. It is also close to State Route 90 and Interstate 405. The Westside office market, where the property was located, had extremely high barriers to entry due to premium land costs, concentrated asset ownership, and a limited supply of remaining developable sites.
According to industry reports, the Westside Los Angeles office real estate market in early 2024 presented a mixed picture. While overall vacancy rates remained higher than pre-pandemic levels, certain pockets, particularly in the Class A sector and prime locations like Century City, demonstrated resilience with high demand and low vacancy rates. Sales activity was concentrated in Class B and C properties, often driven by seller debt issues. Landlords in prime locations held onto their properties due to high rents, while some Class A towers were forced to market due to financial pressures. The market showed signs of stabilizing, with some experts suggesting it may have found its bottom, but overall recovery remained slow amidst evolving work trends and economic uncertainty.
