BMW is driving its design studio into Santa Monica, shrinking its footprint in the L.A. area by nearly 60,000 square feet.
BLT Enterprises has signed BMW’s Designworks studio to a 10-year lease at an office property at 1601 Olympic Boulevard, the firm announced on Wednesday. The building will serve as the BMW unit’s headquarters. Brad McCoy and David Wilson at Lee & Associates brokered the deal on behalf of BLT.
The Santa Monica-based development and investment firm bought the property in June 2019 for about $10.4 million, records show.
BLT then spent three years renovating the entire shell of the building and upgrading it to meet seismic safety requirements.
The lease marks an 80 percent trim in space for BMW. Designworks’ previous headquarters was located at 2201 Corporate Center Drive in Thousand Oaks — a roughly 76,000-square-foot building.
The BMW unit had previously owned their own headquarters in Thousand Oaks, but sold the property last year to an entity linked to developer Cruzan, records show, for $15.7 million. The building is now up for lease, and has been since February, according to a LoopNet listing.
BMW’s new lease comes as L.A.’s office market continues to see high vacancies and a lackluster return to in-person work. About a quarter of all office space in Santa Monica was available in the third quarter, according to Savills, about the same as L.A. County overall.
The deal is also a shift for the automotive design industry, which has made Southern California a hub, drawn by the region’s long standing, freeway-fed car culture. Volvo, GM and Honda all have design units in Los Angeles, while Irvine alone is home to design studios for Kia, Hyundai, Ford and Mazda.
Santa Monica is the most expensive office submarket in L.A., along with Century City, with average asking rates of $5.84 per square foot.
Many major investors in Santa Monica are looking to cash out of office properties in the area, amid high vacancies. Oracle is looking to sell its roughly 320,000-square-foot complex at 2600 Colorado Avenue — a building that is 36 percent vacant — while JPMorgan has listed a 1.4 million-square-foot Water Garden campus on 26th Street.
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