Los Angeles: Ready for its closeup?

It's that time again: CB Insights has released its quarterly VC report. The money's still big, though with a focus on seed deals. Quarter three closed with 835 deals totaling $7.5 billion invested. But CB Insights is quick to dispel any bubble talk, pointing out that unless Q4 brings $9.2 billion in funding, 2012 will show an overall drop in VC investments.

On the regional front, California, New York and Massachusetts are still the big three. Massachusetts is in the number-two spot overall, but in the Internet sector, California gets seven out of every ten deals, New York two and Massachusetts one. Not too shabby.

However, this time around--after getting complaints that Southern California was "the Rodney Dangerfield of VC markets"--CB Insights broke out its California stats to see how the region that would be Silicon Beach fares all on its lonesome. Turns out, having made 70 deals totaling $695 million, it's quite well:

Based on VC funding, SoCal was actually the 3rd biggest market ahead of NY and just behind Silicon Valley and Massachusetts.

Looks like we've just been bumped. Pause for sad trombone noises from the direction of downtown.

Otherwise, New York fared well, hitting a five-quarter deal-count high. And this time around, the good folks at CB Insights allowed that maybe, just maybe, New York isn't a consumer-Internet obsessed one-trick pony, after all:

Although still very tech dominated, the quarter did see NY register signs of life in both green tech and healthcare which typically are nowhere to be found.

The report also notes that, on a national level, seed funding continues to increase. It accounts for 31 percent of overall deal volume; in combination with Series A, it's 55 percent. But don't worry yourself into a bubble-induced case of dyspepsia just yet. The report also points out that these are

Seed VC is a low risk call option for most VCs. If all Seed VC deals failed, it’d be the equivalent of a single medium-sized VC fund going out of business. That happens all the time and presents no risk to the entire VC ecosystem. When it becomes easy to raise big Series C and D rounds, then we’ll talk about a bubble.

Thank goodness. We wouldn't want it all to burst and end up with the Winklevii shut away in their glorious Hollywood Hills home, like latter-day Gloria Swansons.

The new Winklevoss pad. (Photo: TMZ)

As residents of Silicon Alley (a clever knockoff of California's original Silicon Valley), we don't have much room to mock other cities around the country for attempting to claim a piece of the tech pie all for themselves. But we couldn't help but notice in a Wall Street Journal real estate feature that Los Angeles--despite the fact that it's already well-known for being the entertainment capital of the world--is still trying to make "Silicon Beach" a thing. SMH.

The Journal reports that tech bigwigs like Peter Thiel, Mars enthusiast Elon Musk, Romney critic and investor Ray Lane, Matt Jacobson, Facebook's stylish head of market development, the Winklevii and Oracle CEO Larry Ellison have all recently plunked down millions of dollars for vast palatial compounds in the land of smog and nose jobs. The newly blurry line between tech, media and entertainment is enticing young techies with money to burn to ditch the fog for beachfront stunners.

Ever since Google opened its Venice Beach headquarters, home prices in the area have skyrocketed--despite the fact that tech stocks, on the whole, are kind of tanking. And apparently tech titans are much more annoying to work with than even your typical home buyer. "They will challenge your knowledge of the market. And only if you pass will they trust you," one broker said, exercising great restraint by not using the term "know-it-all."

Of course, there's another reason besides the good weather that has "Silicon Beach" filling up.

"A lot of these guys are young, they have cashed out, they are bachelors, they like to party," one real estate broker told the Journal. "And let's be honest, the partying in Hollywood is way better than in Silicon Valley."

Ah, it really is 1999 all over again, isn't it?

That's quite a view. (Photo: TMZ

Say it ain't so! It appears that New York will be losing one of its two Winklevii. TMZ reports (via TechCrunch) that Tyler Winklevoss will be picking up stakes for Silicon Beach, to launch the West Coast outpost of the twins' aptly named VC firm, Winklevoss Capital. (Cameron will be holding down the fort here in Manhattan.)

And since he can't live in some hovel, the twins have purchased an ultra-modern home high in the Hollywood Hills, for a mere $18 million. Careful, gentlemen--that $65 million settlement won't last forever, especially since part of it was paid in Facebook stock.

Says TMZ:

Cameron and Tyler Winklevoss -- who snagged $65 million by settling their beef with Zuckerberg, are getting one of the best homes in the Hollywood Hills.  The house that had been on the lot was bulldozed, and a new, 8,000 square foot crib was just completed with a jetliner view of L.A.

The sleek pad looks like somewhere you'd film a vodka commercial.

Apparently (or at least according to TMZ, and their tech coverage isn't quite as solid as their celebrity death news), the pair "have their eye on SoCal as the new Silicon Valley... thanks to L.A.'s booming tech scene."

From what we hear, the weather's pretty hard to beat, too. But the twins do realize it's too far up the California coast to row to San Francisco for meetings, right?

Esty's Dumbo office via Fred Wilson on Foursquare

At an industry breakfast yesterday, the commercial real estate brokers at Cushman & Wakefield announced that New York City has reached a tipping point: For the first time since 1999, the information and media sector (including technology) beat out financial services terms of office leasing.

In the first quarter of 2012, information and media accounted for 27.8 percent of office leasing by square footage, compared to the financial sector's 26.3 percent. "New York is not just a financial town anymore,” Cushman's managing director Ken McCarthy told the Real Deal.

You don't have to tell Dumbo. Yesterday, the Brooklyn Paper reported that commercial vacancy rates in the neighborhood are down to 2 percent, prompting city planners to try to make Downtown more appealing to Brooklyn's creative class. "Everyone in the tech industry wants to be in DUMBO," said the paper. And here we thought the ideal spot was spitting distance from Union Square Ventures.

Betabeat reached out to real estate broker Chris Havens, an expert in Dumbo's cobblestone streets and East River vistas, to find out more.

According to Mr. Havens, who pegged the vacancy rate at 3 percent, it's a matter of capacity. Dumbo has 1.26 million square feet of leasable office space across just nine buildings, which Mr. Havens said was equivalent to "a few blocks in Midtown South." One hundred and fifty leases have already been signed in the last year and a half.  "This has been building for a long time and it has a lot more to do with the economy," he said noting the proliferation of graphic design, affiliate marketing, consumer tech, architectural, and other creative startups in Dumbo. "It's getting tighter and tighter and tighter."

Mr. Havens said three counties in the country dominate in terms of creative business tenants: L.A. county, New York county, and Kings county. "Brooklyn is booming. In fact some people think there are more creatives in BK than Manhattan," he said, but added a note of skepticism, "Who knows?"

In Dumbo, the two biggest tech tenants are Etsy, "an Ebay for twee people," as the Brooklyn Paper describes it, and Wireless Generation. The amount of space those two companies have taken up has "pushed other tenants out," said Mr. Havens.

But don't founders want to be General Assembly-adjacent? "There’s way more tenants like this in Union Square," Mr. Havens admitted. "But this is $27 dollar [per-square-foot] space. So it doesn't matter what people like in Manhattan."

For Brooklyn residents that want to work close by, there are increasingly fewer options, he said. "There's no space in Fort Greene. Gowanus is tight too. They don’t like Downtown."

As the Brooklyn Paper notes, neighborhood groups are trying to do something about that.

"The DUMBO Improvement District, Brooklyn Navy Yard, and Downtown Brooklyn Partnership have joined forces to launch a task force seeking ways to nurture the borough’s tech sector, both inside DUMBO and beyond. That includes making Downtown more palatable for startups by improving streetscapes, creating a shuttle-bus system between the startup neighborhoods, and providing attractive commercial space."

We're inclined to go with commenter SwampYankee, who wrote, "Because anyone that works in software for a living will tell you a really cool nabe is essential to delivering a quality product in a timely manner. Talent really has nothing to do with it." But maybe we're just jelly. Betabeat is stuck in The Observer offices at Hell's Kitchen, which aside from some standout tacos and a Shake Shack outpost, really lives up to its name.

Photo: Brooklyn Paper

"We couldn't be any more technologically obsolete and incompetant, but we're glad there are lots of people out there that are not that way," real estate developer Jed Walentas told Betabeat this morning by phone. He and his father, who own 13 buildings in the neighborhood under Two Trees Management, are widely credited for the waterfront neighborhood's transition to a younger but slightly upscale mixed-use community by encouraging small, fast-growing companies to move in and providing funding for the arts and now tech communities.