Culver City is a rising key player in the Los Angeles commercial real estate landscape, becoming an increasingly desired destination for a variety of companies. Already home to larger mainstays like Symantec, Sony and the NFL, the proliferating attractiveness of Culver City has been led by the new Expo Line, cheaper rental rates and gross receipts taxes than coastal submarkets like Santa Monica and Venice, as well as a revitalized downtown area providing better amenities. One of Culver City’s key niches has become its bubbling technology and entertainment community, most of which are located in the abundance of creative office space found in the submarket. Many of these spaces are converted industrial buildings that offer the coveted polished concrete floors, bow truss ceilings, exposed brick, natural light, open floor plans and the necessary “cool factor”. The Hayden Tract is the hub for this activity, although several campus communities have emerged including the bLAckwelder campus, Jefferson Palms and Jefferson Creative Center. Some of the larger technology and entertainment companies in these areas include Maker Studios, Media Temple and Magento.
For the companies searching for more traditional office space in professional buildings, the Corporate Pointe buildings are the go-to locations in Culver City, offering 1.3M square feet of traditional rentable building area in eight neighboring Class A office buildings.
The cost effectiveness of Culver City is one of the key drivers for the increased tenant demand. Compared with Santa Monica’s $4/SF rental rates, Culver City’s $2.45/SF offers a significant save opportunity. While the vacancy rates (Santa Monica’s 8% vs. Culver City’s 15%) help drive the rental rate differences, they also point to the larger menu of choices in selecting the office space that fits best for your company. Further, the gross receipts tax difference between Culver City and Santa Monica can save a company up to 83%.
The opening of the Expo Line has offered further incentive to companies by providing access to larger labor pools. Companies that have made the move to Culver City for one or more of these reasons include Mahalo.com moving from Santa Monica, Cuningham Group from Marina Del Rey, Sugar Publishing and Bounce from Santa Monica and Thomson Reuters from Downtown LA.
Culver City is positioned to continue its rise as a top location choice for growing Los Angeles companies. The cost saving opportunities, the supply of creative buildings, the new Expo Line, and the amenity rich downtown will each help draw more tenants. However, as this trend intensifies, the cost benefit may slip away as companies continue to catch on and the laws of supply and demand take effect on rental rates.
*Shared by Ted Simpson, Scott Steuber & Jeff Vertun