A major West Coast office owner said one of its biggest tenants is downsizing while its overall occupancy fell due to softening demand for space.

Los Angeles video game developer Riot Games, known for "League of Legends," is giving back more than 100,000 square feet in buildings owned by Los Angeles-based Kilroy Realty, Chief Financial Officer Eliott Trencher said Thursday on a third-quarter earnings call. Riot Games' decision not to lease space comes as Kilroy's office occupancy shrank to 86.4% from 91.7% a year earlier, according to a Securities and Exchange Commission filing.

The downsizing also arrives after Riot Games signed a lease for 200,000 square feet at 12101 W. Olympic Blvd. and 70,000 square feet at 12100 W. Olympic Blvd. in Los Angeles in 2021. A spokesperson for Riot Games said the company is adjusting its footprint as it moves into the new space it leased in 2021. Riot Games is among the largest video game developers with office space in Los Angeles.

Riot Games occupied roughly 340,000 square feet in Kilroy-owned buildings in greater Los Angeles, which is about 2.1% of Kilroy's total portfolio in terms of square footage, an SEC filing shows. The video game company has other leases in Kilroy buildings expiring in 2024 and 2031.

Trencher said on the call Kilroy is in discussions with Riot Games on a variety of scenarios for the space that's expiring in 2024. Trencher didn't say where Riot Games is downsizing in Los Angeles, and a Kilroy representative didn't respond to a phone call requesting comment.

That said, soon-to-depart CEO John Kilroy said he's seeing positive signs for more office leasing demand in Kilroy's major markets, which include Seattle, San Francisco, Los Angeles and Austin, Texas. The company signed roughly 188,000 square feet of new and renewing leases in the third quarter that ended Sept. 30 and roughly 117,000 square feet of new and renewing leases in October, according to a statement.

"We remain busy," Kilroy said, "and expect to secure more wins on the leasing front during the balance of this year."

Kilroy said that the company is entering the "home stretch" of identifying a new CEO and aims to announce the next chief executive by the end of the year. Kilroy said in March he planned to retire as CEO after nearly 30 years in the position.

Kilroy declined on the call to give more details about CEO candidates and whether the next chief executive would be a Kilroy employee or an external hire.

"It's been a vigorous process and the whole board has been engaged with it," Kilroy said.