Bisnow brought together top execs from the real estate investment and development sector to discuss the economic opportunities present in and around downtown Los Angeles. Many of the panelists held a positive outlook for the LA market, citing a rise in home prices and a recovering labor market as strong indicators of the city’s growing economic strength. However, LA still faces a series of challenges before it can become the high-tech metropolis that many in the real estate industry believe it can be.
Below, I’ve highlighted some of the discussed trends driving the CRE industry in LA.
Where’s the talent? In the past, if you were looking to recruit a large company to a space, you would ask, “Where’s the CEO?” Today, that landscape has changed as a company’s employees are a stronger indication of their needs. For example, Southern California is home to a number of burgeoning tech startups that require employees with very specific, technical skills. As a result, there has been a dramatic uptick in demand for properties in “Silicon Beach” or the Santa Monica, Venice and Playa Vista regions. All of these areas offer a work-life culture that appeals to the up-and-coming generation of Millennials trailblazing this industry.
Rethinking office space. Especially in Los Angeles, one of the most traffic-congested cities in the world, people are spending more time in the office as well as handling more work while in transit. To accommodate this social shift, many organizations are looking at how to reconfigure their workplaces to make them more efficient and appealing to employees utilizing wireless technology.
“New economy” companies. The video game and social media industries are among the most coveted tenants in the CRE market today – these companies are not only looking for a space to fill, but are keen on branding a property with their organizational identity. This presents a significant opportunity for investors to partner with these prospective tenants and to add value to their investment properties.
The above trends indicate a need for CRE professionals to rethink their strategies for tenant recruitment. By better understanding the culture and demographics comprising the companies of tomorrow, the CRE industry can position itself for continued success in the LA market.