In a further sign of the robust health of the South Bay's industrial market, Watson Land Co. simultaneously broke ground last week on five count 'em, five projects. Three are speculative and two are build-to-suits.
Making the event even more noteworthy is that until last week, Watson had not undertaken a single new project in a decade, and no industrial project had been undertaken in the South Bay in nine years, said Kirk Johnson, vice president of marketing and leasing for Watson.
Record levels of industrial space are being absorbed in the South Bay this year; users leased about 3.3 million square feet of space through the first nine months of this year, compared to 2.4 million square feet for the like period last year, according to CB Commercial Real Estate Group Inc.
And state-of-the-art industrial space is tough to find, with vacancy rates scraping 2 percent, down from about 5 percent last year.
"With no new product constructed in the past decade, there's a demand in the market for high-quality space," Johnson said.
Two of Watson's three speculative buildings are in Carson: a 191,700-square-foot structure on East Carson Street and a 109,475-square-foot building in the Watson Corporate Center. The third speculative project, a 51,475-square-foot building, is going up at Watson's Dominguez Technology Center in the city of Rancho Dominguez.
All three, worth a combined total of $10.5 million, are scheduled to be completed in spring 1998.
As for Watson's build-to-suits, one is being built for NEC Logistics America Inc., a computer monitor manufacturer. NEC signed a six-year lease agreement with Watson for a 123,364-square-foot facility Watson is constructing in the Dominguez Technology Center. NEC also signed a six-year lease renewal for its existing 102,519-square-foot distribution facility that is adjacent to the new development. The combined lease renewal and project construction are worth $5.2 million.
Watson's other build-to-suit project is a 100,000-square-foot vehicle preparation facility for Mercedes Benz of North America.
The facility, where cars will be spruced up before being sent to dealerships, is being built on the 15-acre site, along with a separate car storage facility and an on-site test track. Mercedes Benz signed a 10-year lease worth $10 million for the site in Watson Industrial Center South, a 350-acre business park. Mercedes Benz plans to consolidate its West Coast operations there, vacating the 262,000-square-foot facility it presently occupies in Watson's business park, Johnson said.
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