LOS ANGELES-A West side and downtown rent gap is widening. But it is not near levels that might signal the start of another recession, according to a report from Jones Lang LaSalle.

Historically, the West side of L.A. and its nearby towns have attracted tech startups and media companies, while downtown L.A. has been home to large legal and financial service companies. The strong growth rates of the high-risk, high-reward tech and media companies on the West side often leads to a rent gap between them and downtown's more traditional and conservative businesses.

The West side tenants typically experience exponential growth and quickly outgrow their existing premises, but are also quick to downsize. This volatile environment helps create the conditions where rent gaps between volatile companies and downtown's conservatives can potentially grow.

A rent gap of 30% and more between the West side and downtown has signaled two of the last recessions. Currently, the rent gap between the two locations stands at 10%, but is likely to widen as the regional recovery gains momentum, JLL says.

However, the lack of an emergent and dominant economic driver, as seen in past recoveries, may lead to a much more narrow rent gap between West side and downtown properties, the firm adds.

Tony Morales, managing director for JLL, tells GlobeSt.com that downtown's transformation and a pending major deal could lead to more rent volatility in the area.

“The biggest event that can change the market dynamics in downtown L.A. is the pending Brookfield acquisition of MPG Office Trust,” says Morales, noting that the deal still must be approved this summer by shareholders. “Brookfield will then own 8.4 million square feet out of downtown L.A.'s best 20 million square feet of inventory.”

Technically, that could give them the ability to increase rents. But Morales calls that a “big 'if'. They would need to experience positive absorption of nearly one million square feet, and that is unlikely, based on downtown L.A. historic absorption trends.”

On the West side, landlords are trying to limit potential rent volatility by taking a closer look at prospective tech and media tenants, asking for business plans and, where available, historical financials, Morales says.

Workplace changes toward more open offices and collaborative space may also put a damper on downtown rent volatility, Morales says. “It's happening already, but not as fast as people think. Open offices and collaborative space tend to attract more entrepreneurial firms, and these firms are less likely to lease space in traditional institutional buildings. So there are limits to the real absorption of traditional office space in downtown by the tenants who are experiencing the biggest growth in the basin.”

As previously reported by GlobeSt.com, West side creative office space rents are spiking, causing firms to look outside the beach box for space.