Inside the Micro Markets of Playa Vista

LOS ANGELES—The Marina del Rey office submarket is riding off the coattails of Playa Vista. The office market, which has about 1 million square feet, has seen a 17% drop in vacancy since 2012 and has attracted tech and media companies, like Snapchat and Facebook. To find out more about the Marina del Rey market, how it fits into the greater Playa Vista market and about the tenants moving in, we sat down with Chris A. Strickfaden, senior managing director at Newmark Grubb Knight Frank, for an exclusive interview.

GlobeSt.com: Can you give me an overview of the office market in Marina del Rey/Venice and how it fits into the greater Playa Vista market?

Chris A. Strickfaden: Marina del Rey/Venice is a micro-office market on the northwest border of Playa Vista and has just over one million square feet of space. It is seeing about a seven percent vacancy rate after reaching a 24 percent post-recession high in 2012. The reason for this tightening is the substantial presence of technology and media companies here and notable Marina del Rey-adjacent occupiers including Google, Digital Domain, Facebook and SnapChat. At an average asking rate of $3.24 per square foot FSG, it is a little over a dollar less than Playa Vista, however, a major reason is that space availabilities in the B- or C Class space are pulling down the average.  At a closer glance when you remove the older smaller B and C class assets and look at the three primary Class A landlords – the recent office conversions to creative space by Steelwave, Brookfield and Hankey Investment average closer to $4/sf. I believe that as Playa Vista continues to strengthen, this micro-market will benefit from new creative office renovations as landlords seek to secure a better ROI.

GlobeSt.com: Is there a good amount of new development or renovation in this market?

Strickfaden: There is no new construction in Marina del Rey or Venice, however, there are two renovation projects in Venice that are underway and are slated to deliver this spring. They include Redwood Glencoe, which will offer 68,694 square feet of creative space, and 1601 Main Street, which totals 24,000 square feet and is fully pre-leased to Silver Pictures, Inc.

In Playa Vista, Divco, is seeking anchor tenants to begin construction of an additional 100,000 square feet to Waters Edge at 5510 Lincoln Blvd.; Rockwood Capital is in development on 55,000 square feet of new space at Playa Jefferson; The Brickyard is nearing completion of construction (Loyola Film School recently took 50,000 square feet there); and Carlyle Group has renewed entitlements to build 250,000 square feet adjacent to Playa Vista as well as another 250,000 square feet across from the LA Clippers practice facility.

GlobeSt.com: How has the market changed in recent years?

Strickfaden: Over the past 15 years, Playa Vista has evolved from a one tenant creative campus to a multi-faceted residential, retail, hospitality and creative/technology hub with every major technology tenant having some sort of presence here. Yahoo, Verizon (Edgecast), Google, and Facebook are just a sample of those tenants in Playa Vista. These tenants and the “Google affect” have caused countless firms looking to attract the same type of labor pool to make Playa Vista and adjacent Marina del Rey, Venice, and other nearby areas such as Culver City home.

GlobeSt.com: What tenants are growing and expanding in this market?

Strickfaden: Technology, creative tenants, and those related in some way to them. For example, Loyola Marymount recently announced it will be opening an off-site campus at The Brickyard to focus on film and tech education fields. We are seeing companies that are migrating from the Upper Westside, as well as those expanding from Northern California as was the case with our recent 20,000-sf lease with Upload VR in Marina del Rey. Upload originally launched in San Francisco, but has also been expanding its operations here.

LOS ANGELES—The Marina del Rey office submarket is riding off the coattails of Playa Vista. The office market, which has about 1 million square feet, has seen a 17% drop in vacancy since 2012 and has attracted tech and media companies, like Snapchat and Facebook. To find out more about the Marina del Rey market, how it fits into the greater Playa Vista market and about the tenants moving in, we sat down with Chris A. Strickfaden, senior managing director at Newmark Grubb Knight Frank, for an exclusive interview.

GlobeSt.com: Can you give me an overview of the office market in Marina del Rey/Venice and how it fits into the greater Playa Vista market?

Chris A. Strickfaden: Marina del Rey/Venice is a micro-office market on the northwest border of Playa Vista and has just over one million square feet of space. It is seeing about a seven percent vacancy rate after reaching a 24 percent post-recession high in 2012. The reason for this tightening is the substantial presence of technology and media companies here and notable Marina del Rey-adjacent occupiers including Google, Digital Domain, Facebook and SnapChat. At an average asking rate of $3.24 per square foot FSG, it is a little over a dollar less than Playa Vista, however, a major reason is that space availabilities in the B- or C Class space are pulling down the average.  At a closer glance when you remove the older smaller B and C class assets and look at the three primary Class A landlords – the recent office conversions to creative space by Steelwave, Brookfield and Hankey Investment average closer to $4/sf. I believe that as Playa Vista continues to strengthen, this micro-market will benefit from new creative office renovations as landlords seek to secure a better ROI.

GlobeSt.com: Is there a good amount of new development or renovation in this market?

Strickfaden: There is no new construction in Marina del Rey or Venice, however, there are two renovation projects in Venice that are underway and are slated to deliver this spring. They include Redwood Glencoe, which will offer 68,694 square feet of creative space, and 1601 Main Street, which totals 24,000 square feet and is fully pre-leased to Silver Pictures, Inc.

In Playa Vista, Divco, is seeking anchor tenants to begin construction of an additional 100,000 square feet to Waters Edge at 5510 Lincoln Blvd.; Rockwood Capital is in development on 55,000 square feet of new space at Playa Jefferson; The Brickyard is nearing completion of construction (Loyola Film School recently took 50,000 square feet there); and Carlyle Group has renewed entitlements to build 250,000 square feet adjacent to Playa Vista as well as another 250,000 square feet across from the LA Clippers practice facility.

GlobeSt.com: How has the market changed in recent years?

Strickfaden: Over the past 15 years, Playa Vista has evolved from a one tenant creative campus to a multi-faceted residential, retail, hospitality and creative/technology hub with every major technology tenant having some sort of presence here. Yahoo, Verizon (Edgecast), Google, and Facebook are just a sample of those tenants in Playa Vista. These tenants and the “Google affect” have caused countless firms looking to attract the same type of labor pool to make Playa Vista and adjacent Marina del Rey, Venice, and other nearby areas such as Culver City home.

GlobeSt.com: What tenants are growing and expanding in this market?

Strickfaden: Technology, creative tenants, and those related in some way to them. For example, Loyola Marymount recently announced it will be opening an off-site campus at The Brickyard to focus on film and tech education fields. We are seeing companies that are migrating from the Upper Westside, as well as those expanding from Northern California as was the case with our recent 20,000-sf lease with Upload VR in Marina del Rey. Upload originally launched in San Francisco, but has also been expanding its operations here.