Musical Chairs.

The softening Westside market conditions were certainly a consideration in DMX Music Inc.'s recent decision about where to house its Southern California headquarters.

DMX, which provides digital music service to homes and businesses, is merging with AEI Music Network Inc. of Seattle and needed more space than the 26,000 square feet that it has been leasing since 1991 at 11400 W. Olympic Blvd. in West Los Angeles.

Frank Pet, DMX Music's senior vice president, said that alternatives presented themselves early this year.

"We had lots of choices as we rolled over into 2001," Pet said. "Rates didn't soften significantly, but landlords were a lot more reasonable."

Among those "more reasonable" was DMX Music's current landlord, Douglas Emmett Realty Advisors. Pet said his company has been happy with its present location and has had a positive relationship with Douglas Emmett, which translated into productive negotiations and DMX deciding to stay put.

"We looked as some properties out towards the airport, at the (Howard) Hughes Center and the Olympic Corridor and the (San Fernando) Valley," Pet said. "In the end, we got a rate that is probably below what anybody could offer in the market today because of our relationship with the landlord. When we considered the cost of moving and the relationship with our landlord, the rate we negotiated was favorable to us."

The company recently signed a 7.5-year, $10 million lease and will increase its space to 40,000 square feet, Pet said. That includes giving up space that DMX had subleased on the 10th floor and replacing it with direct-lease space encompassing two-thirds of the 15th floor. DMX now has people on three floors.

Douglas Econn and Gerry Porter, principals at real estate advisors CRESA Partners, represented DMX Music in the deal. Douglas Emmett represented itself.