The South Bay office market tightened slightly in the first three months of the year, led by a rebound in the El Segundo/Manhattan Beach area after a weak final quarter of 1998.
The vacancy rate fell to 16.6 percent from 17.4 percent in the like period a year ago, according to Cushman & Wakefield Inc. It was the third time in the past four quarters that the vacancy rate has declined.
Vacancies in the El Segundo/Manhattan Beach market dropped to 11.7 percent from 13.8 percent for the four quarter of 1998, according to Cushman & Wakefield, and construction is making something of a comeback in the area about 452,000 square feet of space is currently being built.
Shamrock Development Co. is in the second phase of its 22.5-acre office and sound-stage project at 1600 E. Rosecrans on behalf of Raleigh Studios. Shamrock is building a 60,000-square-foot office site there, and Continental Development is proposing a two-building, 300,000-square-foot office park on the corner of Rosecrans and Douglas avenues, brokers said.
Construction on the first phase of the Raleigh Studios project, including sound stages and offices, was completed last year and is now 100 percent occupied, reflecting a trend within the entertainment industry to move south. The city of El Segundo is trying to lure the industry, having zoned land specifically for multimedia. Service, sales and technology companies also have been active in the area.
Brokers also said that one full floor 40,000 square feet has been pre-leased at Summit Commercial's 238,000-square-foot building under construction in El Segundo.
Not every South Bay market is like El Segundo and Manhattan Beach, where lease rates have risen 12 percent from a year ago. But activity is picking up in the whole area, with rental rates that have been flat since the second or third quarter starting to move up.
"Momentum is building," said Grafton Tanquaray, a broker at CB Richard Ellis. "Space is becoming available and vacancy rates are up slightly. There's a lot of user activity."
Not all the news is good. Vacancies in San Pedro rose to 12.1 percent from 7.2 percent, and while vacancies fell in the Los Angeles International Airport area by 1.9 percentage points, the rate remains high at 28.2 percent.
Still, a few leasing deals did take place in the area. Imperial Bank expanded its office space by 36,160 square feet at its corporate headquarters at 9920 La Cienega Blvd in Inglewood, while Carlsberg Management leased 21,095 square feet in the Telecredit Building at 6171 W. Century Blvd.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Landlords in Money as Asking Rents Recover to Prerecession Highs
- Top Industrial
- REAL ESTATE QUARTERLY: Vet Broker Says Office Market Delivering Historical Performance
- South Bay
- SOUTH BAY: Declining Port Traffic Prompts Rise in Industrial Vacancies
- Already-High Office Vacancies Get Worse as Tenants Reshuffle