Los Angeles Top Market for Tech Talent

Los Angeles is one of the top markets for tech talent. According to a new report from JLL, the city has the fourth largest tech talent pool in the country, with 110,870 computer and software jobs. The market has grown an impressive 14% in the last five years. Notably, the market has a larger tech talent pool than San Francisco, which came in fifth on the list. New York, Washington DC and San Jose can in the top three positions on the report.

“The Los Angeles MSA is home to a well-educated, specialized labor force. The market boasts some of the country’s leading colleges and universities, offering world-renowned degrees,” Devon Parry, senior research analyst at JLL, tells GlobeSt.com. “Graduates with key skills often choose to stay in the market to find employment. The overall MSA, and the LA market more specifically, has a large aerospace and defense industry and is undeniably the country’s leading entertainment hub. As large technology tenants set up operations in the market and grow their headcount, the local, skilled workforce will continue to benefit from job creation as technology giants compete for top talent in a historically tight labor market.”

The talent pool has had a big impact on the growth of the tech sector, and in attracting new companies to the market. “The deep talent pool in Los Angeles has played an important role in attracting FAANG tenants who have a strong focus on content creation and have aligned themselves with Los Angeles’ entertainment core,” says Parry. “These tech giants from the north have set up local operations in recent years and have signed some of the market’s largest office leases.”

The expansion of companies and jobs has had a big impact. Employees have seen wage increases of 10.3% over the last five years, and for landlords, the new demand has driven new development and increasing lease rates. “Ground up, creative development in key micro-markets has been has been spurred by the growing pipeline of large tenant requirements,” says Parry. “Available talent is the number-one priority for these users, making overall real estate cost less of a concern. With that in mind, the starting lease rates for many of these large deals are at or near market highs.”

The office market isn’t the only asset class benefiting from the job growth. The multifamily market is also seeing increased demand as s result. “The multifamily market is certainly feeling the impact of a growing labor pool,” says Parry. “The Los Angeles market, which is already significantly undersupplied regarding housing, is attempting to supply the overwhelming need. Approximately 57,000 units will be added to the market between 2018 and 2023. Much of this housing development is concentrated in specific pockets in the market, which coincidently overlap with growing office demand.”