L.A.’s Tech Market Is Growing

Los Angeles’ tech market is growing. According to a report from CBRE, the market has created double the number of tech jobs and tech degrees than Orange County. It ranks 26th in the nation for tech jobs.

“Los Angeles is an attractive market for tech talent due to the cluster of higher education—UCLA, USC, Caltech and others—the diversity of industry, its unique cultural fabric, its geography, and the Southern California lifestyle,” Jeff Pion, vice chairman at CBRE, tells GlobeSt.com. “We produce more engineers in Los Angeles, for example, than the Bay Area.  And with an increased focus on health and wellness do to the current COVID situation, we believe that Los Angeles will continue to attract people because of the outdoors, the beaches, and the general emphasis on a healthy lifestyle.”

This isn’t an entirely new trend. Los Angeles has been building a tech talent pool for years. “Los Angeles has always been a magnet for talent of all kinds drawn to the unique SoCal lifestyle and a diverse employment base,” Eric Willett, regional director of thought leadership and research, tells GlobeSt.com. “In 2018, more people in management, business, financial, arts & media, science, and technology occupations moved to the Los Angeles metropolitan area than any other metropolitan area in the U.S. Tech talent is responding to these durable tailwinds for the region, and the remarkable convergence of tech and media over the last decade has added another dimension to the area’s tech talent.”

For commercial real estate owners, the tech talent pool and job centers have a huge impact on the office market. “It makes us better,” says Pion. “It forces developers to build more creative office product in order to attract this new talent pool.  We have seen the tech industry attracted to office environments that merge ‘live, work and play”’ and so we are constantly reinventing ourselves to attract this new work force.”

Office is the obvious beneficiary of the market, but really, every asset class is impacted by the emergence of the tech market. “Industry and employment drive growth.  As the office market strengthens, other sectors follow.  The ecosystem of real estate is very intertwined,” says Pion. Willett adds, “The ripple effects of the region’s tech talent growth may be better described as waves. Tech employment in the region has supported remarkable tailwinds for residential properties in Los Angeles and neighborhoods, especially on the Westside, have been transformed as the SoCal tech talent gravitates to those submarkets. And, the downstream effects have extended to retail, industrial, and the full range of product types.”

Of course the pandemic and the subsequent economic dislocation create an uncertain future, especially with the prospect of people working remotely. However, Pion doesn’t believe that will be a long-term change. “People want to be together,” he says. “They want to collaborate, to exchange ideas, to interact with one another. We are social beings and while the closure of on-campus education will have short-term ramifications, long-term schools and universities will reopen and people will want to be with one another in creative and intellectual stimulating environments.”

Los Angeles’ tech talent growth is on par with New York City, while Orange County and Seattle are growing at a faster pace, 21% and 23% respectively.