I’ve watched the commercial real estate landscape shift dramatically over the past year, and one trend stands out: Westside tenants are increasingly looking south to El Segundo. This migration isn’t just about finding cheaper space—it’s about discovering a market that delivers genuine value through strategic location, modern amenities, and cost efficiency that makes sense in today’s competitive business environment.
Key Takeaways
- Media agency Canvas Worldwide expanded its West Coast headquarters from 36,000 square feet in Playa Vista to 68,300 square feet in El Segundo, representing a 48% increase in office space
- El Segundo’s office market offers competitive lease rates averaging $3.28 per square foot compared to West Los Angeles’ premium rates of $5.13 per square foot for Class A space
- The South Bay submarket recorded 921,000 square feet of leasing activity in Q3 2025, representing a 50.8% increase quarter-over-quarter
The Canvas Worldwide Move Signals Broader Trends
When Canvas Worldwide, a prominent media marketing agency, announced its relocation from Playa Vista to El Segundo in September 2025, it reinforced what many of us in the commercial real estate industry have been observing. The firm didn’t just move—it expanded significantly, growing from 36,000 square feet to 68,300 square feet at 2330 Utah Avenue, a building designed by renowned architect Frank Gehry.
This wasn’t an isolated decision driven solely by cost. Canvas Worldwide sought a distinctive workspace with employee-drawing amenities: walking distance to retail, proximity to the beach, and excellent freeway access. These are precisely the factors that make El Segundo increasingly attractive to businesses that previously defaulted to Playa Vista or other Westside locations.
Understanding the Cost Advantage
As landlords in the South Bay, you’re sitting on properties that offer compelling economics compared to Westside alternatives. The numbers tell a clear story: El Segundo’s office market shows average asking rates of $3.28 per square foot, while West Los Angeles commands $5.13 per square foot for Class A space.
| Market | Average Rate per SF | Class A Rate per SF |
|---|---|---|
| El Segundo | $3.28 | $3.28 |
| West Los Angeles | $5.13 | $5.13 |
| Overall LA Market | $3.58 | – |
This price differential isn’t about settling for less quality. El Segundo has successfully repositioned former aerospace and industrial buildings into creative office spaces that rival anything you’ll find in Silicon Beach. Properties like 888 Douglas, a 600,000-square-foot campus that attracted tenants like Beyond Meat and L’Oreal during the pandemic, demonstrate the caliber of workspace available.
The South Bay market recorded 921,000 square feet of leasing activity in Q3 2025, marking a 50.8% increase quarter-over-quarter. This surge reflects genuine demand from tenants seeking value without sacrificing location quality or amenities.
Location Benefits That Matter to Tenants
El Segundo’s geographic position delivers advantages that resonate with modern businesses. The proximity to LAX—less than a mile for many office buildings—makes the area exceptionally convenient for companies with national or international operations. This matters increasingly as businesses resume travel and seek to accommodate visiting clients and remote employees flying in for quarterly meetings.
The transportation infrastructure extends beyond airport access. El Segundo benefits from direct connections to the I-405 and I-105 freeways, plus Metro Green Line stations that serve multiple lines. For tenants prioritizing sustainability and alternative transportation options, these connections represent meaningful workplace benefits.
The Rosecrans Corridor has evolved into a legitimate retail and dining destination. When Belkin International relocated its global headquarters from Playa Vista to 555 Aviation Boulevard in El Segundo, the company specifically highlighted the walkability to retail and restaurants as a key attraction. This access to amenities helps tenants attract employees back to the office in our hybrid work era.
Amenity-Rich Workspaces Drive Tenant Interest
Modern office buildings in El Segundo have invested heavily in amenities that compete directly with newer Westside developments. Properties feature state-of-the-art fitness centers, coffee shops, outdoor lounge areas with fire features, bike storage, and ample parking—amenities that appeared in Belkin’s 555 Aviation space.
Modern El Segundo Office Amenities:
- State-of-the-art fitness centers
- On-site coffee shops and lounges
- Outdoor areas with fire features
- Bike storage and shower facilities
- Wellness rooms and parent’s rooms
- Ample parking (4+ spaces per 1,000 SF)
- Move-in-ready furnished suites
For South Bay landlords, this amenity focus represents both an opportunity and a competitive necessity. Tenants increasingly expect move-in-ready suites with furnished spaces and flexible lease terms of three to five years rather than the traditional longer commitments. Properties like 222 Pacific Coast Highway offer wellness rooms, parent’s rooms, and collaborative lounges alongside traditional private offices.
The beach proximity that defines the South Bay offers lifestyle advantages that Westside properties can match but not exceed. Many El Segundo office workers start their days surfing at nearby beaches in Manhattan Beach or Hermosa Beach before heading to workspaces equipped with lockers and shower facilities. This genuine work-life integration appeals to the creative and technology workers that companies compete to attract.
Market Dynamics Favor Strategic Landlords
The broader Los Angeles office market faces challenges, with a 23.9% vacancy rate and asking rents at $3.58 per square foot. However, El Segundo’s submarket within the South Bay shows more resilient fundamentals. The overall South Bay vacancy rate stood at 23.5% in Q3 2025, with total availability at 28.5%.
These vacancy rates, while elevated compared to pre-pandemic levels, create opportunities for landlords willing to offer competitive lease structures. Large subleases have characterized recent activity, with companies like COSM and Varda Space Industries subleasing 67,725 and 54,479 square feet respectively from Beyond Meat in El Segundo. This sublease activity reflects tenant downsizing and space optimization rather than market abandonment.
Tenants are implementing hub-and-spoke strategies, maintaining presence in core submarkets while leveraging lower-cost, transit-accessible locations like El Segundo for satellite offices. This trend benefits South Bay landlords positioned to offer flexible space configurations that accommodate these evolving workplace strategies.
The Playa Vista to El Segundo Pipeline
The relocation pattern from Playa Vista to El Segundo has established itself as more than a coincidence. Beyond Canvas Worldwide’s recent move, Belkin International made a similar transition in 2021, leaving Playa Vista for El Segundo’s 555 Aviation Boulevard. Both companies cited similar motivations: expanded facilities, modern amenities, and cost efficiency aligned with hybrid workplace models.
This migration pattern reflects Playa Vista’s maturation as a premium-priced market. As Westside office space commands higher rates, tenants seeking expansion or lease renewals increasingly evaluate South Bay alternatives. For landlords, this represents a sustained pipeline of potential tenants rather than a temporary market anomaly.
The companies making these moves aren’t downsizing or retreating—they’re often expanding their footprints while optimizing their real estate spend. Canvas Worldwide increased its space by nearly 50%, demonstrating that El Segundo enables growth rather than constraining it.
What This Means for South Bay Landlords
As someone who has represented landlords and tenants across 18 years in commercial real estate, I see this moment as strategic for South Bay property owners. The fundamentals that attract tenants to El Segundo—location near LAX, freeway access, Metro connectivity, competitive pricing, and lifestyle amenities—aren’t temporary advantages. They’re structural benefits that will continue drawing businesses from higher-cost Westside markets.
Landlords positioned to offer move-in-ready spaces with modern amenities and flexible lease terms will capture the most active tenant demand. The market rewards properties that understand tenant priorities: efficient layouts for hybrid work, technology infrastructure, wellness amenities, and proximity to retail and dining.
El Segundo has successfully transitioned from its aerospace industry heritage into a diversified commercial hub attracting technology, creative, and professional services tenants. This diversification strengthens the market’s resilience compared to single-industry dependencies.
The office migration trend from the Westside to El Segundo reflects rational tenant decision-making around cost, location, and amenities. For South Bay landlords, this creates opportunity to position properties for sustained leasing activity by understanding and delivering what today’s tenants genuinely value.
FAQs
Why are companies moving from Playa Vista to El Segundo?
Companies relocate from Playa Vista to El Segundo primarily for cost efficiency and expansion opportunities, with office space in El Segundo offering rates significantly below Westside markets while maintaining quality amenities and superior LAX proximity. Tenants also value El Segundo’s walkable retail corridors, beach access, and Metro connectivity that support hybrid workplace strategies.
What are typical lease rates for El Segundo office space in 2026?
El Segundo office space averages $3.28 per square foot compared to West Los Angeles’ $5.13 per square foot for Class A properties. Specific properties range from approximately $2.55 to $4.95 per square foot monthly depending on building class, amenities, and location within El Segundo.
What amenities do El Segundo office buildings offer?
Modern El Segundo office buildings feature fitness centers, coffee shops, outdoor lounge areas, bike storage, ample parking, wellness rooms, and parent’s rooms. Many properties offer move-in-ready suites with furnished spaces, and the proximity to beaches enables workplace shower facilities and bike lockers for active employees.
How does El Segundo’s location benefit office tenants?
El Segundo sits less than a mile from LAX, with direct access to I-405 and I-105 freeways plus Metro Green Line stations serving multiple transit lines. The Rosecrans Corridor provides walkable access to retail and dining, while nearby Manhattan Beach and Hermosa Beach offer lifestyle amenities that enhance employee recruitment and retention.
What is the current office vacancy rate in El Segundo?
The South Bay office market, which includes El Segundo, showed a 23.5% overall vacancy rate in Q3 2025, with total availability at 28.5%. However, the market recorded 921,000 square feet of leasing activity in Q3 2025, representing a 50.8% increase quarter-over-quarter, indicating sustained tenant demand.
Conclusion
The El Segundo office migration represents more than a temporary trend—it’s a fundamental shift in how tenants evaluate value in the Los Angeles commercial real estate market. South Bay landlords who understand this dynamic and position their properties accordingly will benefit from sustained tenant interest as Westside businesses continue seeking cost-effective alternatives without sacrificing location quality or amenities. Whether you’re considering capital improvements, repositioning strategies, or lease structuring that attracts today’s tenants, the fundamentals are working in your favor.
With 18 years of experience representing landlords in commercial real estate transactions, Tolj Commercial focuses on helping property owners position their assets for sustained leasing success. If you’re considering how to optimize your El Segundo office property for today’s tenant demand, let’s have a conversation about strategies that work. Schedule a consultation with Tolj Commercial to explore how we can help you capitalize on the Westside tenant migration trend.
