Interest already high for company’s office spaces
One of downtown Santa Monica’s largest employers is moving out of the Bayside District so it can consolidate its operations.
Rubin Postaer and Associates, with more than 400 employees working at four office buildings all located within walking distance of the Third Street Promenade, officially signed a deal Monday for 110,000 square feet of office space at the MGM Plaza.
The new lease with Tischman Speryer Properties is for space at its Colorado Center, the campus-like office complex occupied by Metro-Goldwyn Mayer, which is moving much of its operation to a new skyscraper in Century City.
Since opening its first office at 1332 Second Street in 1992, Rubin Postaer and Associates has grown from a small start-up advertising agency to one of the largest in Los Angeles County. The company continued to expand by leasing space in buildings scattered throughout downtown Santa Monica.
But that arrangement became expensive and inefficient, company executives said. So they began shopping around for a space large enough to house all of its operations under one roof. Staying in Santa Monica was important to them.
“We think of ourselves as a westside company,” said Gerry Rubin, the company’s president and CEO. “We are a Santa Monica company, and that’s where we wanted to stay.”
High downtown rents coupled with a weak market for office space throughout the Los Angeles region sparked company officials to begin looking for a new location, said the company’s real estate broker, Randy Starr, who works at Tenzer Commercial Brokerage.
“Rents were definitely a motivation, big time,” Starr said. “Downtown Santa Monica, even with the drop-off in rents since the dot-com downfall, haven’t dropped off that much. That’s why it doesn’t make sense for a tenant with more than 100,000 feet of space to stay downtown anymore.”
Staying in downtown Santa Monica also would have been very difficult for the company because office buildings tend to have smaller spaces unsuitable for large companies in need of more than 100,000 square feet of space, Starr said.
“The bottom line is that they have out-grown the downtown area,” he said. “The typical footprints aren’t big enough to accommodate the size of a company Rubin Postaer has grown into.”
The move to Colorado Center, located near the intersection of Colorado Boulevard and 26th Street, should be complete by the end of the year, company officials said.
Some downtown business interests worry the move will take hundreds of bodies off the Promenade during lunch and hurt downtown merchants’ sales, which already are sluggish from the slow economy.
“When any major company moves from the downtown area we are going to feel the impact,” said Kathleen Rawson, executive director of the Bayside District Corp., which partners with the city to manage the downtown.
“The positive side is that Santa Monica is a pretty popular place to work,” she added, “so the turn-around is pretty quick.”
While data doesn’t exist for office vacancy rates downtown, officials said Santa Monica has a 16 percent vacancy rate. That’s up 1 percent from last business quarter, said Mark Richter, director of the city’s economic resource department.
“In general, Santa Monica is fairing better than most areas of metropolitan L.A.,” he said. “In most other primary office areas there are higher vacancy rates than ours.”
There may be some truth to that, Starr said. He said there are already several interested companies looking at the space being vacated by Rubin Postaer and Associates.
“The space being vacated by Rubin Postaer is prime real estate,” Starr said. “Those worried about Rubin Postaer leaving downtown shouldn’t because it’s space that is highly desirable.”
Originally published in the Santa Monica Daily Press print edition on February 4, 2003. Read the original PDF.