DTI Services, Inc.

After 15 plus years of growth and expansion into seven downtown Los Angeles locations, DTI Services, Inc. (“DTI”) engaged Colliers to assess and effectuate a consolidation of all of its locations into one headquarters location. DTI considered relocation out of downtown to surrounding cities, including the South Bay to the Tri-Cities.

 

DTI, a high-tech firm specializing in web hosting solutions, co-location, bandwidth and web page design, had expanded separate business units over the years, but made the decision to consolidate operations to save money, effect economies of scale, and bring the business units in one central location.

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Colliers had previously negotiated DTI’s downtown high-rise leases, including premium top floor leases at US Bank Tower and 601 S. Figueroa Street. In total, DTI leased approximately 71,000 SF of space in seven “Class A” locations downtown with a blended average rent of $3.52/SF, or over $4M per year when factoring in parking ($0.40/SF/Mo) and gross receipt tax expenses ($0.87/SF/Mo). DTI averaged paying the City of LA gross receipts taxes in excess of $735,000 per year and DTI was open to relocating out of LA City to avoid or greatly minimize this gross receipts tax.

 

Colliers surveyed the market and toured DTI through numerous alternatives. Ultimately, the lure of not having to pay a gross receipts tax in lieu of a comparatively lower employee tax in the City of El Segundo was a major relocation factor. In addition, many of the company’s employees lived in the South Bay. DTI benefited greatly from its reduced relocation foot print of over 31,000 SF needing only 40,000 SF. Based upon DTI’s 200 employees, the employee to SF ratio was dramatically reduced from 355 to 198 SF per employee. Further, Colliers was able to negotiate a starting rate of $3.15/SF/Mo. DTI was able to build out custom designed “creative” open plan space in a newly renovated El Segundo building, 101 Pacific Coast Highway.