News that tech startups and residents alike have been moving out of Southern California due to rising prices is missing a big development – surprise! It’s office development on the rise in L.A. Office construction is picking up across the city of Los Angeles. In fact, there was a more than 53% increase in office development between 2016 and 2017 and here’s why.

Submarkets are Benefitting from Primary Market Overflow

Inventory in L.A. proper has been disappearing rapidly for years. In spite of that, last year, office development delivered 2.3 million square feet of office space according to CP Executive. Where this development is occurring is important – it is happening in L.A.’s submarket where non-traditional neighborhoods for investment are benefitting from the overflow coming from spiking rent prices in primary markets.

Developers and businesses alike have been seeking office space near L.A. for all of its known attractions: climate, location, population size, educated workforce and talent pool, etc. However prices are forcing them to look in non-traditional places like Culver City, North Hollywood, and Long Beach.

Job Creation Spurs Office Growth

As these new office spaces are going up, job numbers and growth continue to improve in L.A. and vice versa. Jobs in these areas actually beat the national average for the last two years, adding over 35K jobs with office accounting for nearly a quarter of new jobs in the L.A. workforce.

The new minimum wage of $15 per hour will be required in the next two years leading many manufacturers and government employers to leave the area while attracting workers seeking higher standards of living. Replacing those jobs are companies targeting the highly educated workforce in health and education in California.

Mixed-Use and Revitalization Plans Attract Millions in Investments

Most L.A. residents know that it is the city’s revitalization plans and mixed-use projects that are spurring much of these investments. In many less popular parts of L.A., new developments are completely revamping communities – many to large resident protests granted – combining work, play, and living spaces.

Two high-rise towers are planned for the southeastern part of L.A. bringing jobs and housing to an underdeveloped area. Another mixed-use project near the Jefferson Station is a mixed-use plus transit-oriented development that, if resident resistance is overcome, will bring new office, commercial, and housing space.

Near Crenshaw, a vacant mall is being retrofitted for a massive office space plus hotel and apartment development. City redevelopment initiatives along L.A. River are adding new developments along a long swath of the city including Long Beach and Vernon.

Once a stain on the history of L.A. when gays were jailed, the Lincoln Heights Jail has been approved for a mixed-use commercial office and manufacturing space. The development includes an amphitheater, public recreation, and housing.

The ten story distribution center of the Art Deco Sears tower will be remade into an office and event space as well as a 1K+ unit multifamily development. Nearby a large industrial building will provide 800K square feet of new office space in the Arts District near the L.A. River.