Los Angeles is a great area to develop content, even though at times it is harder to find talent than I would like ;). Plus, with VR being a great industry to be developing in and a lot of those experiences will be entertainment-based, having access to hollywood is a plus.
I will say that UE seems to the engine-of-choice for VR, gaming and non-gaming alike, so there is definitely a need for local office to support the local talent.