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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
mailto:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]:[email protected]