A Tenant’s Guide to the Coastal Westside Office Submarkets
With all of the hype centered on Santa Monica as the premier destination for today’s hot companies, Venice, Marina Del Rey and Playa Vista have quietly become key players for their own unique reasons. Santa Monica’s high rents and low vacancies have made these peripheral coastal markets a necessary alternative for many companies (see my Santa Monica article).
Venice- The artsy alternative to Santa Monica
What some are calling the “Venicessance” is the spillover effects being felt from their Santa Monica neighbor’s popularity as a tech and creative company hub. This historically creative, artistic and hip area has been viewed as a tremendously synergistic location for the plethora of tech and creative companies that have flocked there. Venice has about 100 creative office buildings scattered throughout the market and are largely located along Abbot Kinney Blvd, and most are relatively small, averaging about 6,000 RSF.
Venice has become so popular already that vacancy rates have been very low around 6% for the past few years, causing rental rates to increase about 20% (currently about $3.55) since 2010. This is cheaper than Santa Monica, but more expensive than most other Westside markets.
The limited availability and small buildings make it difficult for expanding companies to maintain their presence in Venice without sacrificing real estate efficiencies and having split occupancies. However, for a smaller and/or start-up business looking for a fun, creative environment with great amenities, Venice could be the perfect fit.
Marina Del Rey- The low cost creative building nucleus
Creative, converted industrial buildings are bountiful in Marina Del Rey, and they are heavily concentrated on Glencoe and Del Rey, between Washington and Maxella, just off the 90 freeway . This area is populated by about 50 of these buildings and has produced a dense and collaborative environment featuring tech and creative companies.
Vacancy rates, after jumping 50% from ’07-’11 to 12%, have just begun to decrease as the attractiveness of Marina Del Rey has become more pronounced. Rental rates, currently $2.50, have moved inversely to the vacancy rates.
Marina Del Rey’s appeal to tech and creative companies has been further sparked by the existence of more experienced companies such as Zynga, Gravity Interactive, Logan Media, RazorGator, Digital Display Networks and South Park Studios.
Playa Vista- The expansion space
The development of Playa Vista has taken massive steps with the 2009 construction completion of several large, state-of-the-art and LEED certified buildings, as well as the multi-amenity, 14-acre complex “The Runway” that breaks ground in June. Over half of Playa Vista’s RBA is available for lease (931,678 RSF) and is already called home by some heavyweight companies, such as Facebook, Fox, Belkin, EA Sports, ICANN, Cyber Coders and Rovi.
The enormous amount of available space in brand-new buildings has drawn experienced and expanding companies to Playa Vista, especially those that are technology and creative focused. The trend has also shown them moving from Venice and Marina Del Rey, needing more space than those submarkets can offer.
Venice, Marina Del Rey and Playa Vista each serve a key purpose in a company’s lifecycle. Lined up along the coast, they can all access similar amenities and labor pools. However, it is the unique specifics of the types of buildings and office space as well as the atmosphere created by the location and existing tenants, that gives each of these submarkets a significant identity of their own.
*Shared by Ted Simpson, Scott Steuber & Jeff Vertun