In a bold foray against the backdrop of a sluggish Californian commercial real estate market, FanDuel, the nation’s preeminent online sportsbook operator, has swept up a luxurious new office in the heart of Beverly Hills. Tucked away on the prestigious Wilshire Boulevard, the gaming giant dropped a hefty $71 million on a 50,200-square-foot architectural gem. With a transaction breaking down to a staggering $1,410 per square foot, FanDuel’s purchase is more than four times the average going rate in Southern California’s commercial property circles—a testament to their commitment to splashy investments despite current market trends.
As industry observers tilt their heads at the behemoth’s latest acquisition, market analysts underscore the Los Angeles office scene’s enduring challenges. With leasing activity floundering and vacancy rates on an upsurge, only flickers of optimism break the monotony—like the recent government agencies snapping up sizeable office footprints. Nonetheless, the future workforce size FanDuel envisions to populate its Beverly Hills base remains veiled in mystery.
Above the fray of this market paralysis is FanDuel’s decision to establish roots in a state that has firmly kept the door shut on both iGaming and sports wagering. The chances of California embracing online sports betting may dangle in the distant horizon, and the notion of setting up virtual casinos seems more elusive, given the Tribal grip on the casino gaming industry. Consequently, FanDuel’s swanky premises may not herald the arrival of a betting bonanza in the Golden State anytime soon.
It is not uncommon for gaming titans to plant flags in territories where they’re not yet operational. DraftKings, for instance, rolled out the welcome mat to a new office in Vegas without involving itself in the local fantasy sports or betting scenes. Similarly, FanDuel’s Beverly Hills office could serve numerous purposes. A strategic move, perhaps, as their television network, TVG, already broadcasts from within the bustling epicenter of Los Angeles.
Indeed, FanDuel’s job board boasts 15 openings in LA, which point to operations linked with the TVG channel, and notably skirt around any direct affiliations with the betting industry.
The office space bonanza promises to be a windfall for Swedish outfit Skanska, the development giant from which FanDuel snagged its Beverly Hills plot. Having acquired and substantially revamped the site back in 2019 for a mere $18.2 million, Skanska’s lucrative exit paints a portrait of profit amidst the region’s real estate slump.
In the grander scheme, FanDuel stands poised to flaunt profitability across 2023, a race to green that no other U.S. sportsbook operator has run. This achievement comes at a pivotal moment as Flutter Entertainment, its parent entity, gears up to parade its shares on the New York Stock Exchange.
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