BXP Snaps Up Big Lease Extension in Santa Monica

Snap Inc., the parent company of Snapchat, has extended its stay in Santa Monica. The social media owner signed a 10-year lease extension for more than 467,000 square feet across eight office buildings at the Santa Monica Business Park, a 21-building, 1.2 million-square-foot creative office campus owned by BXP.

Snap’s current headquarters is located a quarter mile to the south at the city-owned 2772 Donald Douglas Loop. The company occupies more than 720,000 square feet around the city.

Decisions around Silicon Beach

According to CommercialEdge information, Snap has occupied the spaces at BXP’s park since 2017, first leasing 217,000 square feet at 2850 Ocean Park Blvd., a three-story, Class A office building built in 1980. Four years later, it became the park’s largest office tenant when it expanded by 145,000 square feet at 3100 Ocean Park Blvd., a nearby three-story property. Commercial Observer found that the space at 3100 Ocean Park had been previously occupied by video game holding company Activision Blizzard.

The other leases in Snap’s renewal included smaller spaces at 3340, 3250, 3200 and 3040 Ocean Park Blvd., as well as 2900 and 2950 31^st St.

In December, Yahoo Finance reported that the firm was considering reducing its office footprint by some 160,000 square feet. That information emerged more than a year after the company decided to lay off more than 20 percent of its workforce, roughly 1,300 employees.

BXP’s big moves

Snap Inc.’s, lease at the Santa Monica Business Park predates BXP’s ownership. The firm, in a joint venture with the Canada Pension Plan Investment Board, picked up the 47-acre asset in 2018 for $628 million. BXP had entered the Santa Monica market two years earlier with the $511.1 million purchase of Colorado Center, a six-building, 1.1-million-square-foot property.

According to CommercialEdge information, many of the buildings in the park were built between 1978 and 1980, and many underwent cosmetic renovations in 2010. The Park sits inside one of the city’s largest tech hubs, hosting more than 500 companies that include Reality Labs (formerly Oculus VR), Riot Games, Hulu, Tinder, Roku and ZipRecruiter.

The greater Los Angeles office market has struggled in the aftermath of the pandemic, pressured by the remote work trend and the migration of tech tenants to northeastern and southern markets. A fourth quarter 2023 market update from Cushman & Wakefield found that the city’s leasing volume had declined by 31.7 percent year-over-year, while the L.A. West submarket has seen more than 900,000 square feet of negative net absorption. Still, the city has roughly 2.2 million square feet of office space in its pipeline.

The city has fared better on the dealmaking front, generating the nation’s largest transaction volume. Earlier this month, The Regents of the University of California recently completed the $700 million purchase of One Westside and Westside Two, two office properties that UCLA plans to convert into research facilities. In late December, Shorenstein sold the Aon Center, a 1.1 million square-foot tower, to Carolwood LP.