Kite Pharma Takes Awesomeness TV's Former Santa Monica Pen Factory Building
Exclusive: Cancer Research Firm Signs Lease in Santa Monica, California
Cancer researcher Kite Pharma agreed to sublease the former home of media firm Awesomeness TV in Santa Monica, California, bringing months of vacancy to an end in a building in one of the highest-demand office markets in metropolitan Los Angeles.
Kite Pharma signed a deal for 88,000 square feet at the Pen Factory, a 222,000-square-foot adaptive reuse office complex at 2701 Olympic Blvd., owned by real estate investment manager Clarion Partners, according to a source with knowledge of the deal but unauthorized to speak about it.
The property was a Papermate pen factory in the 1950s but was converted into a creative office development in 2017. The project sits in the center of an area known Silicon Beach, home to a cluster of tech businesses ranging from startups to social media website provider Facebook and search engine company Google, that holds some of the highest rents and lowest vacancies in Los Angeles County.
Media and entertainment company Awesomeness TV, which leased the Santa Monica facility about three years ago, was acquired by Viacom in July last year. The company put the Santa Monica offices up for sublease shortly thereafter and moved Awesomeness to its Hollywood offices.
The deal for the Pen Factory space reflects the continued expansion of Kite Pharma, an influential cancer researcher, around its Santa Monica headquarters in approximately 180,000 square feet at Colorado Center, a 1.1 million-square-foot office center at 2525 Colorado Ave. owned by Boston Properties and TIAA-CREF Investment Management.
Kite Pharma acquired a 160,000-square-foot research and development property nearby at 1800 Stewart St. in Santa Monica for $135 million last year. The company also occupies a handful of smaller sites in Santa Monica as well as nearly 104,000 square feet in El Segundo, on Utah Avenue, according to CoStar.
The company has had successful trials for a cancer-fighting therapy known as CAR-T that teaches the body’s natural immune cells to fight malignant cancer cells. That success has made it one of the most talked about biotech companies in the country. Gilead bought the firm for $11.9 billion in August 2017.
The lease deal puts a significant dent in the vacancy of both the building and the area. The office vacancy rate declined to less than 8% today from almost 10% at the end of last year, according to CoStar data. But roughly two-thirds of the vacancies in the city are in the top-tier, or four- and five-star, offices in the area, namely the Pen Factory and the Water Garden office complex.
After the Kite Pharma deal, the Pen Factory has only slightly more than 57,000 square feet of vacant space left. The other tenant at the property has not been disclosed.
"Santa Monica has been and still is one of the most highly sought after office locations in L.A. by tenants and investors alike," reads a CoStar Market Analytics report.