Have you seen any ads for sublease office space on MySpace? Don’t be surprised if you do. MySpace has around 420,000 square feet of office space in Playa Vista, California with a 12 year lease that is sitting empty. They are currently paying more than $1-million dollars a month for the Los Angeles area office space and have total lease obligation of about $350-million over the 12 year term. Rent is scheduled to go up to nearly $2-million next June. Needless to say, it is not a great time to have excess office space, especially true in California.
MySpace signed the 12-year lease in August 2008, when the number of people using MySpace was blossoming and the social network was running out of space in its Beverly Hills offices. The lease began in June of this year. The problem is that since then is that Facebook has taken off at the expense of MySpace. The parent company, News Corp, announced recently that they will receive $100-million less than expected from Google after failing to hit traffic targets.
News Corp also announced that they will be taking a $180-million write off “as a result of excess facility space that we no longer need.”Los Angeles Office Space , Office Vacancy Rate , Sublease Office Space