Silicon Valley South: How the LA Tech Industry Will Impact California Real Estate

Playa Vista, a Westside neighborhood, is home to the new Los Angeles tech boom. Image from Wikimedia Commons

Silicon Valley is more of a culture and way of life then it is an actual physical location. The growth of the tech industry has had an incalculable influence over the Bay Area and, by extension, over California as a whole. It has changed the real estate market enormously by its very existence. If there are changes in the way it does things, it will have a ripple effect across the Bay and throughout the Golden State.

And change is coming. In fact, it is already here. As the Bay Area gets more crowded and ever-more-expensive, the tech industry is moving south and creating other Silicon Valleys. The migration (or expansion) is going to have a huge impact on the real estate market, and not just in LA, but in the Bay Area, as well. This can change your real estate plans, so knowing what is coming is of huge importance.

Playa Vista and the New Silicon Valley

The LA tech industry has never been lacking, even though it has been overshadowed by its northern counterparts for the last 20 years. After all, this is where the great aerodynamic and hardware firms sprouted up and the modern computer age became real. However, the area hasn’t been known as a large magnet for information-age tech firms. But that’s starting to change. Bay Area prices keep skyrocketing (though this might change as a result of the moves) and as companies expand, they want places that their employees can afford.

One of the new hubs is the Playa Vista neighborhood in Los Angeles. This is now home to offices for giants like Facebook, YouTube, Google, Yahoo, and Microsoft. The Westside neighborhood is seeing tech campuses spring up, giving a new vibe to the area. Of course, this means that there are more housing complexes growing, as well as more restaurant, retail, and co-working spaces. There are also more office buildings opening up.

This is due to a couple of factors. For one thing, it was one of the few areas that had underdeveloped land and open space to build. It also hit the trifecta of being close to highways (still a must in SoCal), the airport, and the beach. It’s hard to attract the kind of young workers that tech companies need without some amenities, and the gorgeous coast of LA is hard to beat.

It’s pretty clear that this is going to keep growing, as well. And this isn’t just a fad, but rather something that can change the real estate market, both in LA and in the Bay Area.

What the Rise of the LA Tech Industry Means for California

It’s unsure, obviously, if this will change the LA real estate industry in the same way it changed San Francisco’s. LA had an established tech sector, as well as a lot of other thriving industries, in a way that the Bay Area didn’t. Still, it will bring changes.

Already, the high-end housing market is being snapped up by tech moguls. At the lower industry end, you can expect rental units to rise and smaller houses to be bought by the “tech middle class.” People who were renting in the Bay might now be buying in SoCal. So this can change the housing market altogether, as less pricey houses are picked up and taken off the market. As we’ve discussed, the commercial real estate market follows the residential, so this could cause a boom in growth for all sectors, statewide.

The Bay Area will see some impact from this change. Office space that would be used for Yahoo or Google can open up as employees who would have been housed there move to the southern offices. There can also be less pressure on the housing market, easing prices across the board. The Bay Area will still be the world’s preeminent tech headquarters, with everything that brings, but the newfound ability to expand across the state means that the race for space won’t be as intense.

We’re still at the beginning of this shift and no one can tell you exactly how it is going to play out. If you’re looking to move or to grow, this could be the right time. The market is entering a potential state of flux. The important thing is to partner with real estate experts who understand your concerns and who can help guide you to your next step.

If you’re seeking commercial real estate for your business, you don’t have to go it alone. You can get a thorough analysis from a consultant whose community values align with your own. Contact DCG Real Estate today to learn more.