Move over media, there are bigger players in town now.
For the first time, technology and coworking companies have overtaken media and entertainment businesses as the top drivers of leasing volume in greater Los Angeles, according to a report from brokerage Cushman & Wakefield Inc.
Year-to-date, technology companies signed more than 1.1 million square feet of leases, while coworking companies gobbled up roughly 613,000 square feet and media and entertainment companies si,gned leases for roughly 585,000 square feet.
At this time last year, media and entertainment companies had signed leases for 668,000 square feet. Technology companies had taken on leases for just 384,000 square feet, and coworking companies had entered into leases for roughly 198,000 square feet.
Eric Kenas, market research director for Cushman & Wakefield, said many tech companies from the Bay Area are making L.A. a second home, which is driving the increase.
“There’s a lot of tech-based companies that seem to be growing at a rapid pace,” he said, adding that many of those leases are large.
Technology leasing numbers this year were driven by Google. The tech giant signed a lease in early 2019 for the 584,000-square-foot Westside Pavilion redevelopment.
The project, from developers Hudson Pacific Properties Inc. and Macerich Co., will convert part of the mall into creative office space. Google signed a 14-year lease and is expected to occupy the building in 2022.
Other tech companies signed large leases this year as well. Tech startup ServiceTitan Inc. in the first quarter took on 125,000 square feet at 800 N. Brand Blvd. in Glendale. The building, owned by Beacon Capital Partners, was formerly the headquarters of Nestlé USA Inc. And San Francisco-based driverless car company GM Cruise signed a roughly 47,000-square-foot lease at 465 N. Halstead St. in Pasadena.
On the coworking side, WeWork Cos. Inc. has been on a leasing tear. In July, the group announced it signed a lease for more than 135,000 square feet at the Wilshire Courtyard in Miracle Mile, which will mark the company’s 30th location in L.A.
The group had previously announced plans for 10 other locations in greater Los Angeles, including Santa Monica, Woodland Hills, North Hollywood, Beverly Hills, Glendale and several destinations downtown.
Kenas said he expects coworking and technology companies to continue to sign large leases. He also expects to see companies that work with some of the tech giants that have recently signed leases to follow suit and put down roots in L.A. as well.
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