West Los Angeles Owns Tech

LOS ANGELES—West Los Angeles still dominates the tech industry. According to a new report from CBRE, 86.5%—a total of 592 firms—of all tech companies in Los Angeles are on the Westside. While the Hollywood market has nabbed some major leases lately and has significant creative office development Playa Vista is the emerging hub for tech. In Los Angeles, tech companies occupy 4.2% of the total office space, but in West Los Angeles, tech companies occupy 12% of the office space in the market, a significant increase.

“The amenities and the lifestyle of Santa Monica and the coast have always been popular because they breathe that easier, more youthful feeling,” Blake Mirkin, an EVP at CBRE, tells GlobeSt.com. “There are a lot of CEOs and decision makers that live there, and typically businesses are started where CEOs live. If you look at workforce and recruitment, people like to live on the Westside. While we have had the challenge of rental rates going up and apartments getting more expensive, the youth coming out of college and folks in their 30s and 40s want to live in on the Westside. That is really where the popularity started.”

Now tech tenants are beginning to migrate into the Playa Vista market, in response to both the high rents and the limited creative spaces in Santa Monica and Venice. “Playa Vista is on fire; there is no question. The activity is very dramatic. As the tenants began to grow in Santa Monica, there was a difficult time trying to find large chunks of space,” says Mirkin. “Playa Vista provided large creative blocks of space where tenants could grow in the type of space that they wanted. Tenants used to think that Playa Vista was too far away, but when Google moved to Venice, the connectivity between Santa Monica, Venice and Playa Vista interlaced into what we now call Silicon Beach. The next concern for Playa Vista is going to be over planning or traffic.”

Hollywood is also seeing a lot of migration from tech tenants, some of which are relocating from the Westside into newer developments. However, Downtown Los Angeles still hasn't seen the influx of tech companies, despite great efforts to attract them. Mirkin says, though, that it is only a matter of time before that changes. “We are seeing a lot of activity in terms of exploration, primarily in the arts district. We have not landed a lot of big tenants yet, but it is just a matter of time,” he says. “If you think about it, Playa Vista sat on the books for many years waiting for the first tenants to sign. I think it is just a matter of time before one or two people sign, and once someone dips their toe into the water, we think there is going to be a flood of activity. They haven't signed yet, but it is close.”