Yahoo Subsidiary Moving to Burbank

Internet giant Yahoo Inc. will move a subsidiary from Pasadena to two new buildings at the former Lockheed Martin Corp. Skunk Works site in Burbank next year in a $100-million lease transaction.

Overture Services Inc., which Yahoo bought last year for about $1.83 billion in stock and cash, inserts advertising into Web search results. It is expected to move employees from offices on the edge of Old Pasadena into the Media Studios North complex in Burbank when the buildings are ready.

A 200,000-square-foot office building that Overture will occupy should be completed at 3333 Empire Ave. in about a year, said Jeff Worthe, a principal of developer M. David Paul & Associates, which owns Media Studios North. A 165,000-square- foot building should be completed nearby the following year and Overture has agreed to take 100,000 square feet in that property. The buildings will cost about $75 million to build, Worthe said.

Overture has about 850 employees in 82,000 square feet in Pasadena, according to CoStar Group, a real estate data-services provider. The space Overture agreed to rent in Burbank could house about 1,500 employees. Overture wants to relocate its headquarters to accommodate future growth, a source close to the company said.

M. David Paul bought the Media Studios North property from Lockheed and the city of Burbank in 1995 and 1997. The developer once hoped to build a new arena for the Los Angeles Clippers basketball team on the site, but now has committed to developing as many as nine office buildings.

The property is near the Burbank Media District, where office vacancy was around 14% at the end of the third quarter, according to Cushman & Wakefield.