There’s more than just an IPO in Spotify’s future.
The music streaming service giant is close to leasing 100,000 square feet at 555 Mateo Street in the Arts District near Downtown LA, The Real Deal has learned. The property, known as At Mateo, is owned by a joint venture between Blatteis & Schnur and ASB Real Estate Investments.
For Spotify, the deal would be a major expansion from the roughly 8,200 square feet it now occupies at 9200 Sunset Boulevard in West Hollywood. Financial terms of the deal were not disclosed.
Spotify will join meal-replacement company Soylent, which leased 29,000 square feet in the At Mateo building in March. It will also join the University of Southern California’s design school, which has just leased 15,000 square feet of space at the project, sources said.
The flurry of leases comes amid a shakeup at the $80 million development, which was originally marketed as a retail-heavy project, with 125,000 square feet of open-air retail space and 50,000 square feet of office space. Ownership quietly changed the project mix to an even split of office space and retail when Soylent signed.
Now, amid a delayed opening and a broker shakeup, the roughly 180,000-square-foot At Mateo will be mostly office space, according to sources. The project has yet to open its doors, about a year after the scheduled completion. A CBRE team led by Blake Mirkin has also been replaced with a Cushman & Wakefield team led by Andrew Tashjian.
Blatteis & Schnur and ASB Real Estate Investments did not respond to requests for comment. Brokers from CBRE and Cushman & Wakefield either declined comment, or could not be reached. JLL, which has represented Spotify in the past, could not be reached.
Spotify isn’t the first company to make waves in the booming Arts District. Warner Music Group set an example when it inked a deal for the entire Shorenstein-renovated Ford Factory, a 257,000-square-foot space at 777 South Santa Fe Avenue. Warner — relocating from Burbank — was the neighborhood’s first large-scale office tenant.
In choosing to bet on emerging areas, as opposed to pricey, star-studded Hollywood, Spotify is following the lead of other technology giants. Earlier this month, TRD broke news of Apple leasing all of Lincoln Property Co.’s 128,000-square-foot building in Culver City. That’s in addition to Amazon’s plan to take space at the Culver Steps and Culver Studios in the same neighborhood.