LOS ANGELES-The Los Angeles office sector is trending toward new creative workspaces, largely due to growth in the entertainment and technology industries. “It is a simple formula today: workplace environments that create a community environment,” says Judy Caruthers, EVP of product development services for Jones Lang LaSalle. Caruthers was one of five executives from the firm to speak about office sector trends for a recent JLL video series.

“It is important to create a workplace environment where people want to come to exchange and to innovate,” says Caruthers, who notes that office spaces that offer social amenities, like restaurants and shopping, “lease up the quickest with the highest rates.”

Companies are beginning to see that creative workspace provides a collaborative environment that has a direct impact on the bottom line. “Having a workplace strategy is as important as having a business or marketing strategy. It gives an organization a tool on how to extract the highest and best use out of their real estate,” says Caruthers. Creative office spaces transition traditional window environments to open floor plans that augment mixed use and meeting spaces. Managing director Anthony Gatti explains, “There is going to be a tremendous amount of pressure to bring down square foot requirements; to try to make the space more efficient and try to use technology to make that space more efficient; and to make more open work space and also larger meeting rooms where people can congregate; and to bring a social element into the office where collaboration is very important and where team building is very important.”

In addition to increased efficiency and retention rates, creative workspaces also underscore the corporate culture and brand. “We are seeing companies, corporations, employers refocusing on the workplace to make a statement about branding, about efficiency and about how they are the right kind of company. We are seeing this not only in office space, but in retail, hospitality and residential because there is really a changing consumer taste,” says managing director Carl Muhlstein.

Originally, companies turned to warehouses that provided a blank canvas to mold into a creative space that met the productivity needs and goals of the company. With fewer warehouse options available, Muhlstein forecasts employers will look toward “edgier new construction” for these creative-type of spaces.

The video series also focused attention on the Los Angeles office investment market. “The state of the investment market in Los Angeles is very strong,” says Patrick Inglis, capital markets group VP. “Product that has come out in West Los Angeles, Playa Vista and Beverly Hills has been very aggressively pursued, but overall I think that the availability of cheap debt financing and the equity capital that has been flowing into investment funds has resulted in a very aggressive competition, and you are starting to see more properties coming available. I think that the second half of 2013 will be particularly strong.”

While Los Angeles submarkets on the west side appear to be strong, managing director Tony Morales focused his attention on the downtown market, which he deemed as having a “a schizophrenic nature.” Brookfield recently purchased the McGuire portfolio, leaving four major firms, including Brookfield, with control of 70% of the downtown market. Currently there is no pressure for rent increases, but, says Morales, “It is going to be a very interesting time over the next 10-24 months, and it is going to be a great time for tenants.”

Watch the full video series, here. Read about the video series on the industrial sector, here.

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