Santa Monica's Office Space- The Incubator

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  • 8/2/2019 Santa Monica's Office Space- The Incubator

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    Santa Monicas Office Space- The Incubator

    Overview

    For todays hot Los Angeles start-up, Santa Monica has been the preferred location due to its collaborative

    environment and lifestyle amenities. However, limited creative space and L.A.s highest rents pose problems for the growin

    Santa Monica company. Thus emerges Santa Monicas role as an incubator, housing start-up companies until they need to

    expand into peripheral markets that can provide a similar lifestyle, yet significant cost-saves on their real estate spend.

    What is Santa Monicasfunction?

    Where to go after or instead of Santa Monica?

    Conclusion

    A growing company needs to diagnose and analyze its office leasing choices, weighing the Pros and Cons discussed

    above against the future needs of the firm. Santa Monica is a phenomenal location for a company, but is perhaps not suitab

    for all phases of a companys life cycle- especially a tech company.

    Ted Simpson Scott Steuber Jeff Vertun

    [email protected] [email protected] [email protected]

    MarketAvg.Vacancy

    Rate

    Avg.Rental

    Rate

    Marina Del

    Rey/Venice26% $2.70

    Santa

    Monica7% $3.50

    Some of Santa Monicas peripheral markets (i.e. Ma

    Del Rey, Venice, Playa Vista, Culver City, El Segundo) have

    already begun to see growth in their tech and creative secto

    due to spillover from Santa Monica, especially those by the

    beach that can provide a similar lifestyle. Further, there ha

    already been some big, long-term moves to these markets

    some heavyweights like Facebook, Google, and Zynga that

    legitimizes and sparks more desire for these areas. When

    comparing Marina Del Rey and Venice to Santa Monica, the

    significant disparity in vacancy rates (26% vs. 7%) and aver

    rental rates ($2.70 vs. $3.50) depicts the expansion, flexibil

    and cost-save o ortunities available.

    Santa Monica is currently called home by a plethora o

    technology and creative companies, VCs, Accelerators, and

    Incubators. With Santa Monica creative space vacancy rates

    4%and rental rates surpassing $4/square foot, it is becomin

    increasingly difficult for growing companies to find space and

    it into their budget. Thus, Santa Monicas role has become m

    of an incubator, fostering companies until they reach a certai

    and then have to consider peripheral markets. If growing

    companies cant seem to part ways with their beloved Santa

    Monica they are forced to either pay high rents, have split

    occupancy, or generally sacrifice real estate efficiencies.

    Rod Gould, City Manager, and David Martin, Directo

    Planning & Community Development, recently confirmed th

    Santa Monica is continuing to push forward as the premier

    destination, with initiatives like improving the plan check app

    process, broadband internet speeds that only NYC can compa

    construction of new affordable housing, and construction of a

    Light Rail.

    Googles new home in Venice

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