System1 Signs Large Sublease in Marina del Rey
The space at 4235 Redwood Ave. represents a headquarters move for System1, which was previously based in Venice. The lease is for just under five years.
Beth Sestanovich, chief operating officer at System1, said the company had “outgrown the space in Venice. We were spread out across 14 different suites and wanted to bring everyone together as one.”
“It’s a better working environment, and we can keep people healthy,” she added. “We really just needed more space. We continue to add headcount.”
Sestanovich said the company wanted to stay on the Westside, near where its employees live. System1 first looked at spaces in Venice, but Sestanovich said “there was nothing of a suitable size or nature,” so the search was expanded to the nearby area.
Sestanovich said the Marina del Rey office the company subleased has a lot of benefits.
“It was completely furnished. It has an open office plan which is the way we like it. It was already turnkey and ready to go with very little work needed to be done,” she said. “It fits our culture. It was an easy decision from that point of view, and it has all the parking, which is something we didn’t have in our other building.”
The sublessor, Dollar Shave Club, is holding onto part of the 49,846-square-foot building.
Jones Lang LaSalle Inc.’s Gary Horwitz, Kamil Agha and Blake Searles represented System1. Cresa's Dave Toomey, Grant La Spada, and Dan Gallup represented Dollar Shave Club.
Horwitz added that the property’s outdoor space — two dedicated patios with open garage doors — also made it desirable.
During the Covid-19 pandemic, the amount of sublease space on the market has increased. As of February, sublease availability had risen 70% since the start of the pandemic, according to JLL data.
Horwitz said sublease space can be enticing for clients now.
“We have a number of clients focusing on attractive sublease opportunities right now,” he said. “There is quite a bit of space right now which is fully built out, so there’s no construction costs or hassle.”
He added that there is increasing demand for both sublease space and direct lease space.
Sestanovich said the company was interested in either sublease or direct lease space. Not having to do much buildout at the Marina del Rey building really sealed the deal.
“I don’t have to furnish it. I don’t have to do anything, basically. Anything I do is nice to do vs. have to do. That’s a dream when making a move like this,” she said.
System1 will move into the space in July with a hybrid model in place where team members will continue to work from home some of the time.
Sublease space also usually offers a discount over direct leases, especially if the sublease spaces come furnished with little to no build out needed.
In L.A. the average asking rent for direct leases was $3.79 a square foot compared with $3.24 a square foot for sublease space, according to JLL data.
Original article by Hannah Madans, LABJ Staff Reporter, here.