Machin: Economic growth is strongly correlated to real estate returns. The simple logic is greater economic demand results in greater demand for commercial and residential space. Clearly markets are more nuanced and we look at companies with specific sector exposure. Nonetheless, the first part of what we do is identify the strongest global cities where we can make better risk adjusted returns. We see urbanization as a clear theme with specific winners in the knowledge base economy. We identify the winners through our index.

GlobeSt.com: Where is the city still struggling?

Machin: Affordability in the residential accommodation is an issue. We don't measure that in our index, so an affordability factor does not weigh on LA's rankings. That said, the world's most successful cities are often viewed as expensive. Whilst we don't disagree, we also make the point that people, particularly younger people, often make the sacrifice to locate to expensive cities in order to further their career, the so-called career dividend.

GlobeSt.com: How does L.A. compare to Hong Kong and London, the other two top cities?

Machin: There have very similar characteristics as all three act as a mecca for global talent. Hong Kong and London both have strong trading histories, the foundation of much of the wealth generated in these cities. Where things differ slightly is that LA and London both major in the creative industries and that continues to underpin employment and innovation. Honk Kong less so: financial services are still the major industry with other mainland Chinese cities, such as Shenzen, being innovation hubs and home to major Chinese internet companies. Long-term we think this could be a problem for Hong Kong's competitiveness, although this isn't currently being reflected in the numbers.

GlobeSt.com: What is you economic outlook for Los Angeles this year?

Machin: We still have a positive outlook for LA and our confidence is further bolstered by strong results from major employers in the city such as Netflix. Real estate is often bolstered by agglomeration theory: the success of certain industries results in demand from ancillary companies that support them. The last point I would make supports the importance of Global City investing—re-centralization. We see technology as facilitating centralized working. We view remote working as centralized working, working flexibly from multiple locations in order to interact with people, thereby facilitating ideas and creativity. This is distinct to homeworking where it is hard to foster new ideas. This is the reason behind the rise of companies such as WeWork, as people want to work in a centralized location but aren't committed to one building in that city or even country.