Asking rents in the tech overflow submarket of El Segundo/Beach Cities increased 2.2 percent during the fourth quarter to $2.84 a square foot a month, according to a report from Newmark Grubb Knight Frank.
After growing every quarter during 2015, the overall average asking rent closed the year 8.4 percent above its 2008 peak of $2.62 a square foot a month.
Net absorption totaled 118,573 square feet in the fourth quarter, which helped to decrease vacancy by 70 basis points to 14.6 percent. That brought year-to-date net absorption to 199,123 square feet, which, while a strong figure, is still 38.5 percent below the 2014 total.
The El Segundo/Beach Cities submarket, which has a total of 11.2 million square feet of office space, has now posted net occupancy gains in nine of the last 10 quarters.
Unsurprisingly, due to tech’s migration south from Santa Monica to Playa Vista to El Segundo, the submarket boasted the greatest amount of new tenant demand within the South Bay market area during the fourth quarter and for the 2015 calendar year. El Segundo is lumped in with the Beach Cities, and it is likely that the changes in asking rent would be more stark were it to be calculated on its own, as it has seen the most tech activity as of late.
Major transactions in the fourth quarter included Nexon America’s lease for 47,000 square feet of space at 222 North Sepulveda Boulevard.