Rising rents in Santa Monica may hurt the L.A. tech scene

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As measured by two important barometers -- parties and start-ups -- Los Angeles now has a thriving tech community. Much of it is centered in Santa Monica, near Yahoo’s offices at 24th and Colorado, as this cool map shows. That proximity and cohesiveness, in turn, help the community grow even more, said Benjamin Kuo, who created the website SoCalTech.com (and the cool map).

‘The fact that there are other technology companies located near each other creates a critical mass for the technology industry,’ he said. It creates a supportive environment for start-ups, he said, attracts investors and makes it easier to recruit employees.

But rising real estate rates on the Westside might be threatening that community. Rents on office space are falling in Orange County and the Inland Empire as vacancies rise, but Santa Monica rents are still going up. That, in turn, pushes start-ups and tech companies out of Santa Monica to places farther afield. Comparison shopping site PriceGrabber and News Corp.’s Fox Interactive Media are just two of the many new media companies leaving the area for other digs.

‘Santa Monica has historically had a shortage of large blocks of space,’ said David Toomey, a principal at real estate brokerage Cresa Partners. ‘As younger companies outgrow the space, they have a limited number of alternatives.’

That also means less space for the social and networking events that have helped the community grow.

‘It’s easier to have a tech scene if everyone works in the same neighborhood,’ said Andrew Warner, who organizes networking events for developers and start-ups. ‘Events in Santa Monica are guaranteed to be packed because it’s full of companies, and people don’t have to drive far to get together.’

But even finding space in Santa Monica can be challenging. That was the case for the Rubicon Project, an online advertising start-up that really wanted to stay on the Westside when it was looking to expand from a tiny office near Westwood a year ago. It’s easier to get talent to come and work on the Westside than other parts of town, said Craig Roah, founder and chief operating officer.

The company found a 20,000-square-foot space on Olympic Boulevard and Bundy Drive, but there was a catch: The owners were planning to tear it down in 11 months. The Rubicon Project signed the lease anyway and recently extended as the owners put off the construction project.

‘The market was really tough,’ Roah said. ‘Just trying to find a space that was in a price range that wasn’t ridiculous was tough.’

-- Alana Semuels