Where Exactly Is Silicon Beach?

The Westside led in office absorption in the fourth quarter, according to a new report from Newmark Knight Frank—but that is probably not much of a surprise. The Westside is generally a leader in office activity. Lately, that is because tech companies have planted roots in Santa Monica, dubbing the city L.A.’s Silicon Beach. With rising prices, however, Silicon Beach has moved around the Westside area, starting in Santa Monica before moving to Playa Vista and now El Segundo and even as far east as Hollywood. To find out more about the evolution of a market that drives much of L.A.’s office activity and where it is headed next, we sat down with Steve Kolsky, EVP and managing director at NKF, for an exclusive interview.

GlobeSt.com: The Westside led in office absorption for the fourth quarter. Your report attributed this to activity from tech companies, which have garnered the Westside market the name Silicon Beach. What has been the pattern for Silicon Beach activity on the Westside?

Steve Kolsky: The Westside has always been strong, even in down markets. It always outperforms other submarkets because it is close to where decision makers live. There is always a lot of demand in the Westside markets. As the market gets stronger, people start looking for more affordable alternatives. Playa Vista was that alternative at the beginning of the last cycle. They finally had all of the product in place and the right product mix. So, they had good supply and they were a lower cost option. That market was very hot, filled up very fast and became the new Silicon Beach. What started in Santa Monica moved to Playa. That market has really matured, and there is no longer a lot of space available there.