South Coast Shake-up CPK In, Veritone Out

South Coast Shake-Up:
CPK In, Veritone Out

By KEVIN COSTELLOE
and MARK MUELLER

Artificial intelligenc software company Veritone Inc. has closed its Costa Mesa office and relocated its headquarters to a smaller location in Denver, moves that come as the company, valued at about $1.1 billion, is reported to be considering a sale. The departure of Veritone, which had been among Orange County’s most valuable publicly traded tech companies, has provided an opportunity for the area to expand its base of well-known restaurant chains that call OC home. California Pizza Kitchen is taking over Veritone’s old offices at Costa Mesa’s The Met complex, and will move its headquarters from Los Angeles to the city, the Business Journal has learned. Privately held CPK is set to become the largest restaurant chain to move its base to Orange County in three years, since Chipotle Mexican Grill Inc. (NYSE: CMG) moved to Newport Center from Veritone’s new home of Denver. The move to Costa Mesa “makes a lot of sense for a variety of reasons: it fits with our strategic goals for our new phase of growth; it places us in an important trade area near a high concentration of our CPK restaurants; and our new location delivers against our needs for an open, collaborative, tech forward and COVID safe office space,” Chief Executive Jim Hyatt told the Business Journal. Sales Rumors The rush of events last week came just days after Veritone (Nasdaq: VERI), run by brothers Chad Steelberg and Ryan Steelberg, reported that revenue reached record highs in the fourth quarter and for the full year 2020, while predicting further strong growth this year. It earned $57.7 million in 2020, up 16.2% from a year earlier. About 29% of its 2020 revenues came in the final three months of the year. Veritone said in a recent filing with the Securities and Exchange Commission that it was relocating its corporate headquarters to a building in Denver where it already leases space. It leases about 17,000 square feet in Denver; its Costa Mesa headquarters was nearly 38,000 square feet. Veritone still has a small office in Newport Beach, regulatory filings indicate. Most of its local workforce—reported to be about 135 people as of January—have been working remotely during the pandemic. It’s not known if the Steelberg brothers, who have started several media and tech-focused companies in the area over the years, would be moving to Denver. The company did not comment on the reasons behind the change of headquarters. Exploring Options The change comes as Bloomberg News reports that Veritone is considering a sale. Veritone “is exploring options including apotential sale or outside investment after receiving takeover interest, according to people familiar with the matter,” Bloomberg reported on March 9. Potential buyers were undisclosed in the report, which did not cite any Veritone officials confirming that such a deal was being considered. The company’s shares went up 19% on thenews and closed the day up 5.1% at $30.40 per share with a market cap of just under $982 million. Veritone, the creator of the aiWare operating system for artificial intelligence, is also working with a financial adviser, according to Bloomberg. It said “larger technology companies have expressed takeover interest.” The Bloomberg report came with the caveats that no final decision has been made and the company could opt to remain independent. Asked about the Bloomberg report of a possible sale, Veritone said in a statement to the Business Journal: “We don’t comment on speculation.” In January, Veritone’s market cap topped $1 billion for the first time in three years. Veritone’s stock has seen a wild ride since its initial public offering in 2017, as the company worked to prove the relevance of its artificial intelligence. Its shares were trading under $2 for parts of2020, well below its prior heights. Veritone’s aiWare operating system helps analyze unstructured public and private audio, video and text data for clients in a variety of markets, including media, entertainment, legal, compliance, energy and government to provide actionable intelligence in a searchable database. CPK to Costa Mesa Back in Costa Mesa, Veritone’s former headquarters along the San Diego (405) Freeway are being sublet to California Pizza Kitchen, regulatory filings indicate. Representatives of the restaurant company tell the Business Journal the Costa Mesa spot will serve as the new home for CPK’s corporate, domestic and global franchise businesses. CPK posted about $620 million in 2019 sales, according to estimates from trade publication Restaurant Business. That would have put it among the top seven restaurant chains based in OC last year, based on systemwide sales. 2020 figures for the company haven’t been reported, but are assumed to be well off 2019 levels. CPK, which had more than 200 restaurants going into 2020, was hit hard by restaurant closures during the pandemic and filed for Chapter 11 bankruptcy protection in July. It restructured its debt, ended leases for some locations and emerged from bankruptcy in November. It now counts 195 resturants in seven countries. Its former headquarters in the Playa Vista area of L.A. ran about 33,000 square feet, according to reports. The new location adds CPK to the country’s largest hub for restaurant chain operators, with Chipotle, Taco Bell Corp., In-n-Out Burger and numerous others based in OC (see El Pollo Loco story, page 1). Veritone’s regulatory filings with the SEC indicate CPK will sublease 37,875 square feet of space at 575 Anton Blvd., in a deal that runs through the end of 2024. Monthly rents for CPK start at $2.50 per square foot. The three-floor lease includes ground-floor space at The Met office complex; it’s not
known if a restaurant is in store for that portion of the location.  Costa Mesa  The Met: Costa Mesa office complex getting CPK as new tenant

36 ORANGE COUNTY BUSINESS JOURNAL www.ocbj.com MARCH 15, 2021
Jim Hyatt
CEO
California Pizza
Kitchen
VERITONE INC.
n FOUNDED: 2014
n HEADQUARTERS: moving from Costa
Mesa to Denver
n CHAIRMAN/CEO: Chad Steelberg
n PRESIDENT: Ryan Steelberg
n BUSINESS: artificial intelligence
n OC/COMPANYWIDE EMPLOYEES:
135/286 as of January
n NOTABLE: subleasing former HQ space to
CPK, as sale reportedly being considered