Riot Games, in a bet on permanence over renting, is buying its longtime Element LA campus in the nation's latest owner‑user office transaction as deal activity gains steam.
The video game publisher bought its five-building Los Angeles headquarters from landlord Hudson Pacific Properties for $150 million. Riot Games is also paying the landlord an $81 million fee for terminating a lease at the Sawtelle-area property that was set to run through 2030. The complex totals roughly 288,000 square feet.
The deal, one of the priciest office transactions in Los Angeles this year, marks a shift from tenant to owner for Riot Games, which has fully occupied the creative office campus for a decade. Hudson acquired the assemblage of office properties from companies including Merlone Geier Partners for about $101 million in 2012, according to CoStar data.
The sale is the latest owner-user transaction to take place as private capital takes advantage of discounts in the wake of the COVID-19 pandemic. Such buyers "have made up the lion's share of acquisitions" since 2023, according to CoStar research, though institutional buyers are increasingly making their presence known.
Hudson Pacific is looking to use the proceeds from the transaction to invest in its portfolio in markets that are outperforming Los Angeles, such as San Francisco and Seattle, in part due to artificial intelligence demand. That's "where we're seeing the strongest leasing momentum," Hudson Chief Executive Victor Coleman said in a statement.
Riot Games, which also leases 200,000 square feet at the nearby West Edge office building at 12101 W. Olympic Blvd., will consolidate its Los Angeles footprint into the headquarters. The global esports company with titles such as "League of Legends" and "Valorant" has been adjusting its footprint amid job cuts and broader gaming-industry pressures.
Tenant to landlord
Riot Games moved into the complex after Hudson Pacific redeveloped the 12-acre site's former collection of outdated warehouses and offices into a state-of-the art complex with a basketball court, video game arcades and movie theaters in 2015.
"With the sale of Element LA, we're realizing the value we've created through our successful transformation and full stabilization of this asset,” Coleman said in a statement.
The sale arrives as Los Angeles sees a modest rebound in office trading activity, with transaction volume up 28% over the past year, according to CoStar data. Even so, fundamentals remain strained: The city’s office vacancy rate is holding at 16%, and tenants shed a net 2 million square feet over the past 12 months, a slower pace of move-outs than the 4 million square feet recorded the prior year.
Owner-users like Riot Games have surged as key players in LA's office market, now driving nearly half of all deals while institutional investors’ share of volume has fallen from 45% to 26%, according to CoStar data.
Riot Games started out in Los Angeles nearly two decades ago and has evolved into one of the most influential publishers in competitive gaming. Riot became a breakout force in 2009 after launching "League of Legends," a title that helped popularize the free-to-play model and laid the foundation for modern esports leagues. By the mid-2010s, its annual world championships were drawing viewership rivaling major traditional sporting events.
The company was acquired by tech conglomerate Tencent in December 2015 and has since expanded its portfolio with games such as "Valorant," "Teamfight Tactics" and "Legends of Runeterra." The company has also diversified into entertainment, producing the Emmy-winning Netflix series "Arcane" and expanding its music, animation and influencer brands.
Hudson Pacific trims portfolio
Hudson Pacific's latest deal makes good on plans the landlord recently spelled out to consider selling some of its office properties as the West Coast market hits an inflection point.
Similar to other major owners across the country, the Los Angeles-based real estate investment trust is leveraging rising valuations to land deals and recycle the proceeds into upgrading their portfolios.
Office demand across the country started showing signs of stabilizing in mid-2024 after years of pandemic-induced uncertainty that sent vacancy rates to record highs, froze capital markets and left many landlords scrambling to determine where it would all settle. While the national vacancy rate remains stuck at about 14%, tenants late last year signed on for more space than they offloaded, a first since at least 2021, according to CoStar analysis.
Over the past several months, heavyweights such as Highwoods, Kilroy Realty, BXP, Cousins Properties and Hudson have marked their return to the capital markets with deals that have added tangible price tags to their willingness to bet on the market's gradual recovery.
For Hudson, executives have attributed that recovery to the return of larger lease deals, booming demand among artificial intelligence companies and strong venture capital investments.
Those improving market dynamics are now prompting the firm to evaluate sales of some of its office properties for prices "that could be much higher than they were, let's say, 12 or 18 months ago," Coleman recently told analysts. "We've got a list of a few assets that are there, [and] those opportunities are going to come fast and furious."
The Los Angeles REIT owns 41 office properties, with eight in Los Angeles, 23 in the Bay Area and 10 in Seattle. The firm boosted its fourth-quarter 2025 outlook by about 400% after paying off some CMBS debt with proceeds from the Element LA sale.
Wild run for Riot Games
Riot, meanwhile, is navigating a reset after a turbulent period marked by shifting consumer spending and a maturing esports ecosystem. The company cut hundreds of jobs this year as part of a broader reorganization designed to refocus resources on its highest-performing titles.
The company hired Hoby Darling, who has led global business and product teams at Nike, Logitech and Skullcandy, to serve as president in April.
"We're refocusing on what Riot does best — delivering great live games and building experiences that matter to players. That's where our long-term trajectory is headed," Darling said in a statement when he joined the firm in April.
The firm also owns a 150,000-square-foot office property near Seattle at 3003 77th Ave. SE in Mercer, Washington, that it bought for $114 million in 2021.