Once hungry for square footage, the first faux meat manufacturer to go public in 2019 is shedding space in El Segundo, California, to right-size its real estate portfolio in the face of weaker demand for its plant-based foods.
Beyond Meat has cut space at its headquarters at 888 N. Douglas St., giving back more than 61,000 square feet of its 282,000-square-foot lease to the landlord, according to a May 15 SEC filing. Beyond Meat now occupies about 220,000 square feet in the office building that's owned by Hackman Capital Partners.
The headquarters contraction comes as Beyond Meat faces a declining and disrupted market for plant-based meat and mounting financial losses. In the first quarter, the company reported a nearly $53 million net loss and a 9.1% drop in revenue year over year.
The company is not alone. U.S. retail sales of plant-based meat fell 7.5% over the past year, with refrigerated plant-based burgers dropping 26%. Meanwhile, conventional meat sales rose, according to industry trade journal AgFunderNews.
Beyond Meat predicts increased demand ahead, with a new $100 million loan to fund growth and plans to spend more on marketing plant-based meats as a healthier source of protein to a skeptical public.
"We should be a central part of satisfying consumer interest for protein," CEO Ethan Brown told investors on the company's first quarter 2025 earnings call, "but we need to reestablish ourselves within their decision set."
Change of menu
Plant-based burgers surged into the mainstream around 2019, fueled by fast-food rollouts, health-conscious marketing and investor enthusiasm for meat alternatives.
Beyond Meat first leased the El Segundo site in 2021 as part of an ambitious expansion when protein-craving yet health- and environment-conscious consumers were snapping up imitation meats.
But by 2022, consumer interest cooled amid taste concerns, high prices and shifting dietary trends, sending sales and category growth into decline. In the third quarter of 2022, Beyond Meat reported a 22.5% year-over-year decline in revenue and laid off nearly 20% of its global workforce. In early 2023, Beyond Meat began marketing 50,000 square feet at the El Segundo property for sublease.
Moving forward, Beyond Meat is "doubling down on cost-savings initiatives," Brown said, including consolidating more of its manufacturing activity at a facility in Devault, Pennsylvania, and closing its operations in China.
The lease amendment at the El Segundo property includes a $1 million termination fee, a $200,000 equipment transfer to the landlord, and $600,000 in construction costs to retrofit the surrendered space. Beyond Meat will also pay rent on the space until December or until it’s re-leased — and must cover any rent shortfall if a new tenant signs below its rate.
The property, developed by Hackman Capital Partners, is a converted aerospace facility with 30-foot ceilings, a sawtooth roofline, and manufacturing and lab spaces.
Rents in El Segundo average $47 per square foot, above the Los Angeles metro average of $42, according to CoStar data. The El Segundo office market's average vacancy is 17%, down from 18% a year ago but still above the greater Los Angeles average of 16%.