It is an area with a galaxy of multi-million dollar homes and some of the choicest beach property in California–and in the last three years it also has become one of the county’s treasured business locations.
Welcome to the Beach Cities Corridor, which stretches from Santa Monica to Palos Verdes.
In the past three years, some 5 million square feet of office space has been leased or purchased along the 16-mile corridor, which is why the average vacancy rate there is only eight percent, noted Craig Meyer, senior vice president of The Seeley Company.
“This trend is broadening,” added Meyer, “because so many entrepreneurs and high-level management people live in the coastal area stretching from Malibu to Palos Verdes. The Internet millionaires just love this area.”
Based on a survey conducted by Seeley, leasing activity breaks down in the chart at right, for 1997, 1998 and the first six months of 1999.
“Most surprisingly, it is El Segundo, which is attracting not only the biggest companies, but also a vast number of well-financed startup companies,” observed Meyer. Corporate residents here include such major entities as Hughes Electronics Corp., Raytheon, Northrop Grumman, Xerox, Chevron USA, and International Rectifier, all of which have more than 1,000 employees. The city is also corporate headquarters for Unocal and home to many high tech companies which include Electronic Data Systems, Infonet Services, Computer Sciences, Oracle, Yahoo, Sybase, Candle Corporation and many smaller software firms.
Candle is a particularly interesting case.
The firm, which bought the former Rockwell building in El Segundo and moved from the Water Garden, Santa Monica, lowered its occupancy cost by about 50 percent without losing any employees, according to Tom Porter, Candle’s vice president of corporate real estate.
Proximity to the airport and the Westside, plus an appealing business tax structure are major lures of these areas west of the 405 freeway, said Seeley’s Meyer. “And so are the attractive rental rates–far less than the monthly $3-4 per square foot rents commanded by Santa Monica, Beverly Hills and Century City,” he added.
The profusion of hardware and software companies to this area has even led to a building being named e.tech center, the veteran broker pointed out.
Although just 120,000 square-feet, the six-story building, located at 1700 Walnut Ave., is wired to handle more than 8,000 two-way telephone conversations simultaneously as well as provide ready access to the Internet, according to Greg Galusha, vice president, Kearny Real Estate Company, the owner.
“Our tenants are here not only because of location and attractive rents, but also because of the terrific amenities–restaurants, recreational amenities and retail facilities in the neighborhood,” stated Galusha, whose firm is an affiliate of Morgan Stanley Real Estate Funds.
Heading into the year 2000, it appears that El Segundo will continue to be a major destination for business.
“The major reason for this assumption,” said Jim Hansen, the city’s director of economic development, “is that El Segundo is friendly to business not only when there are economic downturns, but also in the good times.”
“Like anyone else,” he added, “business wants to be wanted.”
Dick Lewis is with Lewis and Associates. For more information, call him at 323-938-2012.
