Digital gaming and e-sports is heating up in the Los Angeles market, and it is creating opportunities in commercial real estate. According to new research from JLL, there are 223 gaming companies in the L.A. area, an increase of 150% in 2017. It is expected to grow another 5% by 2020. The growth in that industry has had a major impact on the commercial real estate market and has created a robust new tenant niche. To find out more about this growing sector, we sat down with Kevin Carroll, a research analyst at JLL, for an exclusive interview.
GlobeSt.com: How is the growth of the gaming industry impacting commercial real estate in L.A.?
Kevin Carroll: L.A. has more than 200 digital gaming developers. Demand for gaming is going through the roof. There are more than 2.5 billion gamers worldwide, and the industry is projected to have revenue north of $90 billion by 2020. The market is enormous and demand is driving creative people to produce new, stronger content. Given L.A.'s existing cluster of gaming companies, commercial real estate will certainly feel the effects of the expanding industry.
GlobeSt.com: Which submarkets are seeing the biggest impact and why?
Carroll: The Westside is home to several gaming companies as is Central L.A. These areas are where talent is located as well as where venture capital dollars are flowing. We're also seeing more demand from virtual reality companies in pockets of Mid-Wilshire and Hollywood. With the e-sports hype, there are growing clusters around the three existing e-sports arenas in the greater LA region.
GlobeSt.com: Why has Los Angeles become an ideal market for this industry?
Carroll: Gaming is finding a particularly strong niche because L.A. has an employment base with strong footholds in technology, media, and entertainment. Talent is fueled by strong tech program offered by Cal Tech, as well as UCLA and USC having two of the top gaming design programs in the country.
GlobeSt.com: Is this market fueling new development as well?
Carroll: The industry itself is not driving new commercial development. It is just one facet of the dynamic creative industry mix that L.A. offers and landlords are certainly trying to create spaces that cater to all creative industry users.
GlobeSt.com: What is your outlook this year for the gaming industry and its impact on CRE?
Carroll: In the fall Blizzard unveiled their new stadium, which can seat 450 spectators. Given all the money the industry is making, I absolutely see new companies absorbing space and successful existing companies expanding. Furthermore, the L.A./Orange County region has 4 e-sports arenas already. It's only a matter of time until more start to pop up.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kelsi Maree Borland
