Processing is Replacing Packing in Revitalized Vernon

Real Estate

by Danny King

If Dynamic Builders Inc. is an indication, the City of Vernon is continuing its transformation from a meatpacking center to a diversified hub of food processing and shipping companies.

The Los Angeles-based developer has completed and sold three buildings totaling 245,000 square feet at the corner of 55th and Alameda streets in the past nine months. Among the buyers were a lamb products trading company, a seafood distributor and a cold storage company. With a fourth building under construction and pre-sold to another cold storage company, the total value of the properties sold at the site will be $43 million.

“Out with the old, in with the new, that’s what we’re seeing in Vernon,” said Ken Jackson, director of sales for Dynamic Builders.

The company, which has developed two million square feet of industrial space in Vernon since being founded in 1964, purchased the 14-acre property, which was previously a gypsum plant, in July 2000 and broke ground on a 111,000 square-foot structure built for Preferred Freezer Services later that year.

Jackson said Vernon’s location near downtown L.A., along with low business taxes and controlled utility costs (the city has its own power plant), were draws for food companies looking to cut costs and maximize efficiencies.

Additionally, despite being just two miles from the Los Angeles Produce Mart, Vernon land values are 20 to 30 percent less than downtown, according to Dwight Hotchkiss, senior director at Cushman & Wakefield Inc.

“There isn’t much land in downtown to build on, so companies have to look at adjacent markets like Vernon and Commerce,” said Hotchkiss, who represented H & N Foods International on its $10 million purchase of a 78,000-square-foot building at the industrial park last month.

As a result, food processing and refrigeration companies are moving in where meatpacking companies have been moving out. Last December, Shamrock Beef Processors and Emerald Meat Co. shut down their Vernon plants, laying off 360 workers in the process.

South Bay Boom

Centex Homes continues to hone in on the South Bay as an area of development for its single-family homes.

The Dallas-based homebuilder purchased a 15-acre vacant property at Avalon Boulevard and 228th Street in Carson for more than $13 million, with plans to build 147 new homes over the next three years. The seller, Olson Co., had spent last year getting entitlements before selling the site.

“It was actually a shopping center that had been shut down for four years and literally falling to pieces,” said O’Donnell/Atkins Co. Vice President Roland Chavez, who, with Scott Richardson and Craig Atkins, represented both buyer and seller. “Once Olson got involved, they razed the site.”

It was the entitlements and the lack of new product that drew Centex to the site, according to David Pitts, vice president of acquisitions and forward planning for the company’s Los Angeles/Ventura division.

“There are not many opportunities for new homes in that price range in that area,” said Pitts, adding that “the city is pleased that we are transforming a vacant area into a quality new neighborhood.”

Homes at the yet-to-be-named project will start at $300,000, putting them in the upper range of the area. The median price of a home sold in Carson in January was $234,000, an 18 percent increase over the year-earlier period, according to San Diego-based DataQuick Information Systems.

The project will be Centex’s second South Bay development. The 128-unit Breakers at Del Amo in Torrance began pre-sales last June and will be completed in about two years, according to Pitts.

Lofty View of Santa Monica

While downtown Los Angeles has its Tom Gilmore, Santa Monica appears to have its own producer of loft-style living in Avi Brosh.

Brosh’s company, Palisades Development Group, purchased a vacant half-acre lot at the corner of Main and Marine streets for $3.7 million, with plans to build a 43,000-square-foot mixed-use project. The development will include 24 loft-style condominiums, as well as 9,000 square feet of retail space on the ground floor.

The project is the fourth Santa Monica loft development in the works for Brosh, who, as president of Braemar Group, helped usher the longtime tract home developer into the urban infill market. Two condominium projects on Colorado Boulevard and one apartment and retail development at 4th Street and Santa Monica Boulevard are all scheduled for completion in June.

“We’re going to bring a lot of what we learned on the other projects into this one,” said Brosh.

Because the site does not have entitlements, Brosh estimated that groundbreaking is “at least a year” away.

Tech Anomaly

Spotted: A West Valley technology company that’s actually increasing its office space.

Med & #233;a Corp. took 27,000 square feet at Malibu Canyon Business Park in Calabasas in a four-year sublease deal with Redwood City, Calif.-based Clarent Corp.

Med & #233;a, which manufactures disk storage systems, is moving to 26707 Agoura Rd. from its Lindero Canyon Road corporate offices, expanding its space by 50 percent in the process. Financial consideration figures were not disclosed, but sources estimate the sublease deal at about $2 million.

The expansion comes at a time when vacancy rates on the tech-heavy 101 Corridor have been on the upswing. West Valley vacancy rates in the fourth quarter 2001 were 17 percent, up from 10 percent in the year-earlier quarter, according to Grubb & Ellis Co.

“It’s one of the few examples out there where a technology company has expanded,” said CRESA Partners Principal Dave Toomey, who, with Brian Davies, represented Med & #233;a in the deal. “They were out of space.”

One tech firm’s gain is another’s loss. The space became available after Clarent, a data network service provider, downsized its operations, cutting its 55,000-square-foot occupancy at the business park down to 21,000 square feet, with an additional 7,000 square feet still on the sublease market. “Clarent had excess space that was built out, furnished and wired,” said Toomey. “It was a fast deal.”

Margie Fichter at Cushman & Wakefield Inc. represented Clarent on the deal.

Staff reporter Danny King can be reached at (323) 549-5225 ext. 230, or at

[email protected].