Clearly, the arrival of Raleigh Studios Manhattan Beach, a complex of sound stages where TV shows "Ally McBeal" and "The Practice" are filmed, hasn't hurt the area's image. Neither has the Manhattan Gateway retail complex, brimming with hip customers who shop at Trader Joe's, Barnes & Noble, Old Navy and REI.

"The South Bay has the tightening vacancy rates and the rising rents the Westside experienced," Shannon noted. "(Car) traffic is getting bad."

In response, Continental Development, the area's largest landlord, is planning to build a 300,000-square-foot speculative building with a 1,100-car garage at the corner of Rosecrans Avenue and Douglas Street. It is expected to be ready for occupancy in about 18 months, said Alex Rose, director of development for Continental.

More office space will be available as projects are completed in El Segundo near LAX. A partnership that includes developer Ron Flesch plans to construct a $180 million office and studio project on a 46-acre site south of LAX. Flesch's El Segundo Media Center LLC is in escrow to purchase the 45-acre property from Federal Express.

Industrial space in the South Bay is also seeing strong demand. The vacancy rate in the first quarter hit 3.8 percent, down from 4.1 percent at year-end 1999. Developers are responding by planning new state-of-the-art industrial buildings.

"Right now we have 4.5 million square feet of industrial space planned or under construction in the South Bay," said John Schumacher, a first vice president at CB Richard Ellis. "The vacancy rate for class-A product is virtually zero."

One of the biggest projects to get underway this quarter is in Rancho Dominguez, an unincorporated area adjacent to Carson. Carson Cos. broke ground this month on a 3.1 million-square-foot industrial park project that is part of the Dominguez Technology Center.

Already, HomeGrocer.com has signed a 10-year prelease to occupy a 116,000-square-foot warehouse and distribution center in the industrial park.

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