EL SEGUNDO, Calif. – September 26, 2017 – The joint venture ownership of Rockwood Capital & Marshall Property & Development has leased a 33,085-square-foot (sf) Class A creative office building at Campus 2100 in El Segundo (Los Angeles County), California to Thai Union North America, Inc. Chris Sinfield and Tom Sheets, Executive Directors in Cushman & Wakefield’s Los Angeles-South Bay office, represented the landlord in the transaction, and Travers Cresa represented the tenant.
Thai Union, which operates as a holding company that through its subsidiaries processes and distributes frozen shrimp, fish products, and other types of frozen and canned seafood, is moving its two local Southern California offices into the entire single-story building at 2150 Grand Ave. The company penned a long-term lease for the space and will be relocating from San Diego and the nearby PCT campus, retaining its presence in El Segundo. Occupancy is expected in the fourth quarter of this year.
Campus 2100 is a unique three-building coastal campus positioned at 2100, 2120 and 2150 Grand Ave. at the corner of Continental Ave. The campus consists of a six-story office building (2100), a three-story office building (2120) and a single-story creative office building (2150) located within minutes of Interstates 405 and 105/Imperial Highway, Los Angeles International Airport and the Pacific Ocean. The new lease by Thai Union brings the campus to 94% occupancy.
Mr. Sinfield said, “Campus 2100’s recent expeditious occupancy growth has been a pretty significant feat for the market given this was a single owner-user campus for much of its history. When visual effects and animation company Rhythm & Hues Studios went bankrupt in 2013, they essentially left a majority of the asset vacant, with the exception of just one tenant, creating a rather challenging void to fill.
“Rockwood Capital & Marshall Property Group’s decision to reposition Campus 2100 as a modern creative office campus really delivered what so many creative, tech and corporate office tenants want. And HLW really executed perfectly from both an architectural and design perspective to greatly enhance the uniqueness, quality and appeal of this desirably located campus.”
Mr. Sheets noted, “El Segundo is seeing strong leasing velocity from organic growth as well as migration from other markets.” According to Cushman & Wakefield’s midyear 2017 report, the El Segundo office submarket is nearing single-digit vacancy in the mid 11% range, virtually halved since 2012. It was also among the best-performing office submarkets in all of Greater Los Angeles in the first half of 2017 with nearly 140,000 sf of occupancy growth. Over the past four and half years, El Segundo has absorbed nearly 900,000 sf on a net basis.
Additionally, year-over-year, South Bay office vacancy has plummeted from over 19% to 16.3% in Q2 2017, and from over 23% in 2012. This market has achieved four straight years of positive net absorption (2013-2016), with 2017 on pace for its fifth. Over the past four and a half years, companies have absorbed over 1.5 million sf on a net basis. Further, 2015 and 2016 marked its highest net absorption levels since 2007, respectively, and 2017 is currently on pace to exceed both.
The report also finds that rents have been consistently trending up and South Bay asking rates have now surpassed peak levels of the previous cycle in 2008 by 12.8%, driven largely by a 23.2% rent growth in El Segundo.
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