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# MGM move is latest casualty in commercial market
- URL: https://www.smdp.com/mgm-move-is-latest-casualty-in-commercial-market/
- Published: 2002-10-05T15:00:00.000Z
- Updated: 2026-10-23T00:46:19.000Z
- Author: Guest Author
- Tags: Business, Santa Monica, #archive-import

*Local office vacancy rate dropping slowly*

*By JASON AUSLANDER Special to the Daily Press*

In addition to MGM movie studios, several other large companies are making plans to leave Santa Monica in the next year or two, a city official said.

And while the impacts of those companies moving will depend on what, if anything, takes their place, there are signs that Santa Monica’s sky-high office vacancy rate may be coming back down to earth.

MGM, which occupies about 200,000 square feet of office space in a campus of buildings at 2450 Broadway, will move its headquarters to a brand new, 30-story building in Century City in May 2003, said Lea Porteneuve, vice president for MGM corporate communications.

The building, currently under construction at the corner of Constellation Place and Century Park West, will allow the studio to consolidate its operations under one roof, instead of having them spread out in five or six buildings, she said.

4A6,“It was an opportunity to return to L.A., where we originated,” Porteneuve said, adding that Constellation Place will be renamed MGM Drive once the studio moves in.

“Yes, I know of other companies that are making plans to leave Santa Monica,” said Gwen Pentecost, the city’s senior administrative analyst for economic development. She declined to name those companies.

Santa Monica’s office vacancy rate, which mostly takes into account so-called “class-A” spaces, has sky-rocketed in the last two and a half years. In the first quarter of 2000, the rate stood at 0.6 percent. By the fourth quarter of 2001, it had reached 20 percent, officials said.

The failure of numerous dot-com businesses and the lingering economic recession are two of the main reasons for the glut of office space, she said. The city lost 5,000 jobs in 2001, mostly because of the tech crash, Pentecost said.

Currently, the office vacancy rate is a “very high” 18 percent, Pentecost said.

However, one commercial real estate broker said the situation has been looking up over the last three months and the 18 percent figure is not accurate. Randy Starr pegged the current office vacancy rate at “maybe 10 percent.”

6BB,“Things are filling up,” said Starr, a broker with Tenzer Commercial Brokerage Group. “I’ve filled 40,000 (square) feet of vacant space in the last two months.”

> “I’ve filled 40,000 (square) feet of vacant space in the last two months.” — — RANDY STARR Commercial real estate broker

The majority of the newly-rented office space is being occupied by tenants who were already located in Santa Monica and are either taking advantage of cheaper rents or renegotiating current leases, Starr said. However, a few larger companies — those needing 80,000 square feet of space or more — are looking around Santa Monica, he said.

Mark Richter, economic development manager for Santa Monica, said MGM’s move is tempered by the fact that much of the space it now occupies has already been leased to a law firm, which will move here from Century City. The firm will sit in the middle of an area of Santa Monica known as “media row.” The eastside of the city was developed as a business park more than a decade ago to attract large companies such as Epic Records, Sony Music, MTV and Universal, all of which are still here.

To retain the companies now here and lure new ones, Pentecost and others are talking directly to large and small businesses, and working with various area economic development groups like the Los Angeles Economic Development Corp., and the Westside Economic Collaborative.

Santa Monica has never offered incentives to businesses to locate here, Pentecost said, because “for a long time, we haven’t needed to.” Traditionally, the office vacancy rate has hovered between 4 and 7 percent, she said.

Santa Monica City Councilman Richard Bloom said the idea of offering incentives has not been brought up among council members and he hopes it won’t be necessary.

![](https://storage.ghost.io/c/55/9f/559f9abc-8372-4a2e-8c2d-27386da4e363/content/images/2026/10/100502-02_01.jpg)

trademark sign of MGM Studios will soon leave Santa Monica as the company moves its headquarters to LA. (Photo: File photo The)

![](https://storage.ghost.io/c/55/9f/559f9abc-8372-4a2e-8c2d-27386da4e363/content/images/2026/10/100502-02_02.jpg)

is not alone in its battle with gridlock on its main thoroughfares. (Photo: File photo Santa Monica)

*Originally published in the Santa Monica Daily Press print edition on October 5, 2002.* [Read the original PDF.](https://s3.us-east-1.amazonaws.com/smdp%5Fbackissues/100502.pdf?ref=smdp.com)