EarthLink Network, one of the nation's largest Internet service providers, has taken a preliminary look at leasing up to 500,000 square feet of space in downtown Los Angeles, where a glut of office vacancies has resulted in bargain rents.
Prominent real estate broker John Cushman is representing EarthLink, which has considered space in high-rises at Union Station and in the Spring Street historic district, according to people familiar with the search.
But executives of EarthLink, which employs 2,000 people at its east Pasadena complex, said they are merely reviewing their options for if and when they outgrow their current space and that they are not yet planning a move.
"We just need to be prepared if we need to expand our data center and our operation," Vice President Kristen Kappos said. "Right now we are not doing anything."
Executives at Cushman Realty did not return calls.
A new high-technology tenant would go a long way toward polishing downtown Los Angeles' image as well as absorbing vacant space. The downtown vacancy rate during the second quarter rose to 27.1% from 24.4%, according to a study by Cushman, which attributed much of it to Wells Fargo Bank and Bank of America vacating space after mergers.
High-tech companies have traditionally settled in low-rise, suburban office parks. But a few, such as Adobe Systems of San Jose, have moved into downtown areas in search of low rents and unusual spaces. Downtown Los Angeles has already seen a surge in leasing from telecommunications firms that want to tap into its high-speed fiber-optic network.
"It would be a great addition to downtown," said Clay W. Hammerstein, a broker at Insignia/ESG in Los Angeles. "They would get highly visible signage and more amenities."