It's actually interesting to note that office property in SV is anything but cheap and as a construction project (I believe) is just as attractive for developers as a typical derelict block in East London. However, this does not stop SV from being SV.

Let's face it: some of the offices around Old City Roundabout are pretty grim. Bad plumbing, windows overlooking someone's wall or a dumpyard, barely working HVAC, you name it. What is that the startups have to lose? If all those old office blocks will be demolished and will be replaced with a shiny new one, that's fine. Sure, Last.fm will need to move elsewhere and a new tenant in the building most likely will be KPMG, DLA Piper or RBS, but it's not that that hypothetical Last.fm will have nowhere to move. There are still plenty of cheap grim office property around (in Croydon, for example) but the borough only wins from getting rid of the old ones.

All in all, if a London startup ecosystem is here to stay, gentrification is too unimportant of a problem to kill it.