Los Angeles:Unrivaled capital markets activity helps to push rents for premium El Segundo product
The class A office inventory in El Segundo has seen a flurry of capital markets activity over the last five years.
February 25, 2020
- Almost 70 percent of the class A inventory, amounting to 32 properties, have traded hands at least once in this time frame. This sales volume is one of the highest of any other micro-market within the Los Angeles basin.
- The increase in investment activity speaks to the viability of the El Segundo office market. The market is located directly south of the dynamic Westside submarket, and offers not only proximity but comparable product for those tenants who are being priced or pushed out of the Westside due to its single digit vacancy and high watermark asking rents.
- While rents for large blocks of creative space in El Segundo currently appear to be a relative bargain compared to neighboring office markets to the north, asking rental rates within the class A El Segundo market have seen a dramatic increase in tandem with the capital markets activity. Class A asking rents have increased by 54 percent over the last 5 years. While some of this increase can be attributed to the improvement of overall market fundamentals, a correlation can also be drawn between the investment activity, subsequent renovations and capital improvements, and the push by new ownership to recoup capital expenditures.