It's no new story that El Segundo's office market has been benefiting from activity in West L.A.—but the activity seems to be heating up, with escalating pricing, better yields and high interest from a diverse investment pool. Campus 2100, a 203,946-square-foot class-A office campus in the market, recently traded hands for $117 million—the second highest price tag per square foot in the market. The asset garnered interest from domestic core funds, REITs, and some foreign investors, and Kevin Shannon, West Coast president of capital markets at NKF and the lead broker on the deal, says that competition was fierce. We sat down with Shannon to talk about the growing activity in the market and why investors are rushing in.

GlobeSt.com: What does the high price tag on this property say about the office market in El Segundo?

Kevin Shannon: The per square foot value is high for El Segundo but this is a best-in-class asset. Which means it also generates best-in-class rents higher than much of the El Segundo market. The yields offered by Campus 2100 are far superior than those found on most West Los Angeles office sales and dramatically lower on a per square foot than other prominent parks such as Playa Vista.

GlobeSt.com: How has pricing in the El Segundo market changed in the last year?

Shannon: Pricing in El Segundo has been escalating the last two years. Capital continues to recognize the increased attraction of this marketplace to tenants who have historically preferred West LA. El Segundo's rents have risen dramatically, especially for renovated product such as Campus 2100, but remain much lower than West LA markets without LA city taxes. Rising rents have resulted in rising sales prices, which have been augmented by a tremendous increase in the amount of capital available from all buyer groups who have put El Segundo on their A-market shopping list.

GlobeSt.com: What is driving activity in the market?

Shannon: El Segundo has superb transit access in a coastal climate only minutes from the beach. The quality amenity concentration along Rosecrans and Sepulveda is conducive for companies looking to attract the best local talent from USC, LMU, UCLA etc. These new graduates love locating in the neighboring Beach cities of Manhattan Beach and Hermosa. There is an abundance of executive housing in the South Bay as well without the magnitude of traffic issues found in West LA.

GlobeSt.com: Outlook for El Segundo next year?

Shannon: El Segundo is clearly on an upward trajectory and will continue to improve from both a rental and pricing perspective. The per square foot value in El Segundo appears cheap compared to recent West LA sales comps. The market has a lot of momentum.