Los Angeles

The streaming wars have triggered growth in ancillary support industries in Los Angeles. According to a recent tech report from CBRE, Los Angeles is among the leading markets for tech job growth, and now another report from the firm shows that the market is leading in legal job growth as well. Los Angeles has the second highest legal job growth in the country, behind only Atlanta. From 2016 to 2018, the legal jobs have increased 13.2% in Los Angeles, an addition of 69,000 jobs.

"The real sector that is growing is the technology and streaming companies, like Hulu, Netflix and Amazon," Danny Rees, first VP at CBRE, tells GlobeSt.com. "That market has exploded, and I think there is an increased demand for legal work, especially Century City. There are a lot of people working in those businesses in the legal sector. It is an ancillary effect."

The Century City market is seeing the biggest impact from the employment growth. Most of law firms, particularly those serving entertainment companies, are located in Century City. "We have really seen the majority of the growth in Century City versus Downtown Los Angeles, and I think that is because we have seen the most business growth on the Westside," says Rees. "Lawyers need to be on that side of town to service those clients."

As a result, there is a shortage for large blocks of space in Century City. "We have never seen the market so frothy. It can become challenging to put together large pieces of space. From that perspective, finding viable options for our clients in the Westside markets, have become challenging," adds Rees.

Downtown is the second most active legal market in the Greater L.A. area, but it hasn't seen the activity that Century City has. "There is a stigma about coming downtown with traffic. If your top people live on the Westside, traffic is daunting. It has always been a matter of where do the decision makers live and where are the clients. Those locations typically win the day," says Rees.

However, that may change. With limited availability for large floor plates in Century City, Rees expects more firms will have to move to the downtown area. In addition, Downtown L.A. is also significantly less expensive, about $40 per square foot less annually. "Some firms are going to have to make the move to Downtown Los Angeles," says Rees. "First, because there will be nowhere else for them to go. Second, the rates have popped, and I think some firms might look at it and say that it makes sense. We haven't seen it on a large scale, but I think that something will have to give eventually."