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DirecTV to double the size of its El Segundo headquarters

In a lease valued at more than $300 million, satellite broadcaster DirecTV will rent 630,000 square feet in three buildings on East Imperial Highway near Los Angeles International Airport, landlord Kilroy Realty said.

November 03, 2011|By Roger Vincent, Los Angeles Times
  • The DirecTV building in El Segundo is shown in 2006. The satellite broadcaster has agreed to double the size of its headquarters in a lease valued at more than $300 million.
The DirecTV building in El Segundo is shown in 2006. The satellite broadcaster… (Reed Saxon, Associated…)

Satellite broadcaster DirecTV Group Inc. has agreed to double the size of its El Segundo headquarters in a lease valued at more than $300 million.

DirecTV, which beams television service to more than 19 million subscribers, will rent 630,000 square feet in three buildings on East Imperial Highway near Los Angeles International Airport, landlord Kilroy Realty Corp. said Wednesday. The broadcaster said it expects to expand into a total of up to 720,000 square feet over the course of the nearly 16-year agreement.

The lease effective Jan. 1 is the largest in Los Angeles County in the last decade, according to real estate brokerage Jones Lang LaSalle, which represented DirecTV in the deal.

Signing of the massive lease by DirecTV says more about the brisk growth of technology and entertainment companies than it does about any improvement in L.A. County's lackluster office market.

Neighborhoods favored by tech and digital media companies, such as Santa Monica and Burbank, have shown the strongest signs of life in terms of office rent and occupancy this year, industry statistics show.

DirecTV already occupies 330,000 square feet in two of the three buildings at 2240, 2250 and 2260 E. Imperial Highway owned by Kilroy. The office towers built in the 1980s were previously occupied by Hughes Aircraft Co., which spun off DirecTV.

Founded in 1990, DirecTV is the nation's second-biggest provider of pay-TV services and the largest satellite provider in Latin America.

Hughes occupied much of the office space in El Segundo during the aerospace giant's financial peak in the 1980s. Office landlords in the area have struggled to find tenants in recent years, with vacancy in El Segundo now about 21% and nearly 35% in offices on Century Boulevard just outside the airport, according to brokerage Cushman & Wakefield.

DirecTV's deal is a boost for the area, said real estate broker Gary Horwitz of Jones Lang LaSalle.

"We have here a relatively young, dynamic and thriving company that is making a long-term commitment to the South Bay market," he said. "Having a new technology company down there for the long term is very positive."

DirecTV released a statement saying it intends to "create a campus that will reflect its premium brand and transform the work environment to enhance productivity, collaboration and innovation."

The company, which has nearly 2,000 employees in El Segundo, didn't respond to questions about whether more employees would be hired to fill the additional space.

Los Angeles County's soft office market has been a boon for tenants willing to sign leases and lock in depressed rental rates. Few companies are finding the need to expand their quarters, however, with the economy tepid and hiring at a standstill. DirecTV restructured and extended its existing lease with Kilroy.

Overall, Los Angeles County office vacancy rose slightly to 19% from 18.5% in the third quarter last year, according to brokerage Cushman & Wakefield. The average rent landlords asked for was $2.47 a square foot per month, down from $2.56.

Shares of DirecTV closed down 13 cents at $44.86 on Wednesday. Shares of Kilroy Realty rose $1.06 to $36.20.

roger.vincent@latimes.com

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