Move over, Silicon Beach. The hottest new tech market is Downtown Los Angeles.
I spoke with Variety’s Todd Longwell about the increasing number of tech companies relocating from Silicon Beach to downtown, which was traditionally home to mostly banking, legal, and professional services firms. This new wave of tenants is coming east and ushering in a new era for Downtown L.A.
Fifteen years ago, downtown was a sleepy, ho-hum market with nothing going on. You worked from nine to five. Five o’clock hit and you went home. It is totally different today. You’ve seen a huge influx in new residential and retail and restaurants. People are living here, working here, playing here. You look out the window now and it’s just full of cranes.
It’s undeniable that Downtown L.A. is bustling with development with over two dozen buildings under construction, plus a liveliness and authenticity that can’t be found in on L.A.’s west side. Tech tenants are taking notice.
All Def Digital, the multimedia company founded by Russell Simmons, relocated last year from Culver City to 600 Wilshire Boulevard, one of the properties I lease downtown.
“Downtown was important because it is core to the company’s mission to be representative of urban, hip hop culture,” says Sanjay Sharma, CEO of All Def Digital, in Variety. “It feels a little funny to say that’s your brand and your mission and you’re in Santa Monica. Playing a role in the revitalization of downtown is important to us.”
In addition to All Def Digital, Evite relocated its office from West Hollywood to Downtown L.A. earlier this year, also to 600 Wilshire, and Uber Technologies Inc. recently signed a lease for 18,000 square feet office space at the L.A. Times Campus, a move that should help energize the sleepy Civic Center area.
The influx of tech companies may be pushing up rental rates downtown but tenants are still paying much less than they would in Silicon Beach. With the new tenants moving into the market, rental rates are as high as almost $5 a square foot. But in West L.A., you’ll see rates still much higher — almost $7 a foot in areas like Santa Monica and beach-adjacent cities. The market is going nowhere but up.
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I specialize in the Downtown L.A. office market.