Dot.com Settling in Santa Monica

The laid-back beach scene combined with Santa Monica's sophisticated restaurant and shopping options are a lure for computer whizzes and creative types.

Santa Monica was a tech industry outpost for the same reasons in the great boom of the late 1990s. That boom ended badly, of course, but the flag had been planted. Defunct dot-coms left behind converted industrial buildings and other so-called creative offices ripe for the revival now underway.

The tech cluster is big enough now to be self-perpetuating, industry observers said. Internet companies and related enterprises such as entertainment and advertising firms that work in digital media want to be near one another for business and social reasons. Togetherness abets recruiting and networking.

Expansion often comes at a cost. New companies may start out in small converted industrial buildings with polished concrete floors and exposed ductwork, but they often discover, unhappily, that they must rent more corporate-looking space in large buildings as they grow.

Creative workers "feel constrained" in such standard offices, TrueCar's Hansen said. "One of the things that defines a successful tech company is the company culture. Tech people tend to be fairly nonlinear." Not all firms that fit that profile can afford to be in Santa Monica or want to pay its high rents. Neighboring markets also benefiting from the tech-entertainment boom include Playa Vista, El Segundo, West Los Angeles and Culver City, which has lower rents and taxes.

Southern California's tech industry is growing robustly and is, by some estimates, the second-largest in the country, but it still lags far behind Silicon Valley and other parts of the Bay Area, brokers said. 

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Source: LA Times