When Amazon announced that Long Island City would be one of two new locations for its HQ2, the media were abuzz with the news that New York City could soon become the next technology hub, rivaling Silicon Valley. The entrance of the company was expected to be a major economic development initiative, creating as many as 107,000 jobs directly and indirectly, and building a campus of over 4 million square feet, according to a Nov. 16, 2018 Curbed article.
Long Island City was already the country’s fastest growing neighborhood prior to the announcement, with median home prices rising from $509,000 in 2012 to $769,000 in 2019. Real estate information company PropertyShark examined searches for homes in Long Island City on its platform Point2Homes, and found that queries for properties in the area exploded by nearly 200 percent in the three days following the news. After the announcement, even less pricey areas such as Astoria, Greenpoint and Sunnyside were seeing a surge in home prices due to the ripple effect of high demand in Long Island City.
Expectations for Long Island City have changed, however, since Amazon canceled its plans to move into the area on Feb. 14 following community backlash. While expectations for home prices in Long Island City and surrounding areas are returning to their pre-Amazon levels, other parts of the country continue to experience transformations as a result of a company’s relocation to the area. A new office or headquarters can have a profound impact on property values, development and future real estate patterns.
Here’s how three Silicon Beach spots have transformed as a result of companies moving in.
Shaping Santa Monica
Santa Monica, a coveted destination famed among tourists and locals alike, is home to film and television streaming company Hulu, which moved into its custom-built headquarters with over 90,000 square feet in March 2013. Bringing more than 500 jobs to Santa Monica, Hulu is one of the many companies that contributed to a skyrocketing median home list price in the area, surpassing $3 million in March 2018, according to Realtor.com. With access to quality public transportation and a walkability score of 83, the wealthy coastal neighborhood has been recognized for record-setting home prices. The growth in the number of jobs has made luxury real estate even more competitive, with the average price per square foot rising from $981 to $1,154 in the last year, according to real estate information site Trulia, while inventory continues to shrink.
The Renaissance of Playa Vista
Similarly, Playa Vista has become a tech hot spot over past few years due to its close proximity to Los Angeles International Airport and Downtown Los Angeles. Contemporary, open structures with sprawling floor plans and outdoor space are ideal for companies like Google and YouTube, which have brought more than 1,000 jobs upon moving to Los Angeles. Playa Vista has become a popular location location for large corporations to invest for the future, simultaneously causing an incredibly tight real estate market with inventory shortages and increasing office space prices due to the tech boom. Even with the market cooling off compared to more recent months, the median home price in Playa Vista is $1.36 million as of Feb. 6, up from a median price of $677,500 five years ago, according to Trulia information.
Once the ultimate beach town, Venice has evolved into a trendy hotspot among young professionals who crave modern amenities, convenience and close proximity to the beach. Many tech entrepreneurs dealing in software development, virtual reality and ecommerce have taken over the beach town, turning it into what has now become an increasingly competitive real estate market. With the average price per square foot reaching $1,188 in February, according to Trulia, Venice real estate is surpassing even the most luxe neighborhoods in Los Angeles, as Bel Air’s average price is $1,024 per square foot and Beverly Hills is seeing $1,006 per square foot for February 2019. While many wealthy homebuyers have been known to seek out large estates in the mountains, millennials have sought out Venice as the place to create modern homes, causing the median price of a one-bedroom home to increase by over 50 percent since 2012. Venice has adapted to reflect the trendy styles of those millennials in the tech industry, with a growth in higher-end retail mirroring the surge of affluent homebuyers in the area and the rising cost of living.