Kilroy Relocating Offices to Westside Media Center

Commercial real estate developer Kilroy Realty Corp. has seen most of its new buildings fill with tenants even as the region’s economy has declined over the last year or so. Nearly all of the company’s new office buildings--and even some still under construction--are fully leased.

But the company has struggled to find tenants for the two newest buildings at its Westside Media Center project ever since would-be “anchor” tenant EToys closed its doors.

So Kilroy will relocate its corporate headquarters to the West Los Angeles complex from El Segundo--where the company has been based for half a century.

Tenant demand for Westside office space has become “fairly anemic” compared with previous years, Kilroy President and Chief Executive John B. Kilroy Jr. told analysts during a quarterly conference call late last week. Other landlords in the West L.A. area also are struggling with rising vacancy rates and falling rents. They face competition from tenants looking to sublease extra space as well.

The Westside Media Center project’s 78,000-square-foot first phase, which Kilroy renovated after purchasing, is entirely leased to AT&T; affiliates. The 150,000-square-foot second phase--which EToys had agreed to lease--sits vacant. And the third phase, offering the same number of offices as the second, is scheduled for completion by the end of March and also lacks tenant commitments.

John Kilroy told analysts the company will relocate to Westside Media Center’s phase-two building. The company’s current headquarters is in a 12-story tower at the Kilroy Airport Center complex on Imperial Highway.