LOS ANGELES RANKS NO. 2 FOR TECH OFFICE GROWTH IN CBRE'S LATEST TECH-30 REPORT
Buoyed by double-digit tech-sector employment growth, Los Angeles ranked second among the 30 leading tech markets for office rent growth, up from 12th place during the prior period, according to CBRE’s annual Tech-30 report, which measures the tech industry’s impact on office rents in the leading tech markets in the U.S. and Canada.
Los Angeles’ high-tech employment increased 14.7 percent during 2016 and 2017 compared with a 13.5 percent rise during the prior two-year period. Average office asking rents rose 15.8 percent from Q2 2016 to Q2 2018. Los Angeles’ combination of lower office rents as compared with the pricey Bay Area to the north and a growing high-tech labor pool make it an attractive market for commercial real estate investors.
The Los Angeles County office market has benefitted a great deal from expanding technology companies, including many based in the San Francisco Bay Area. Tech firms based in the top four headquarters markets have leased 1.3 million sq. ft. in the LA area over the past five years and have helped thrust the regional office sector out of the recession, according to CBRE research.
“Never underestimate the weather and the beach; it’s a very Southern California-specific amenity that employers can offer to their workers like nearly no other region can; and today is all about amenities and experiences,” said Chris Penrose, first vice president at CBRE. “This city has done a great job in developing many of its submarkets into vibrant live-work-play neighborhoods with great entertainment and better transportation options, such as Hollywood, Downtown, Culver City or the Tri-Cities. Many local as well as out-of-town employers have definitely taken note of that.”
He added “LA’s immense popularity today with tech employers is also closely related to the emphasis on content creation. These companies require large amounts of space and employees to help produce an immense number of movies and shows, and the Greater LA area, with all its high-quality talent and great office markets to choose from, can provide just that.”
Click here to view the report.