The Mid-Cities market, with its swath of aging industrial buildings, emerged as an unlikely hero in the first quarter.
Despite declining international trade and a reputation as a spillover market for companies conducting port-related business, the area bucked the softening trend.
Sale and lease activity jumped nearly 30 percent to top 1 million square feet, while at the same time vacancies fell three-tenths of a point since the end of the year to 1.4 percent, according to Grubb & Ellis Co.
With less than 1.5 million square feet of space available and industrial rents only lower in the Central Los Angeles area, tenants jumped at chances to sign leases in a market where little new space is coming on line.
Ortho Mattress company, for example, leased a 97,078-square-foot building in La Mirada at 15300 Valley View Ave. for 45 cents per square foot for a lengthy 10 years.
Only 272,465 square feet of space was under construction in the quarter, less than every other industrial market in the county.
"There's minimal vacant land for new development. You're going to have to tear down old facilities in order to build new ones," said Steven Calhoun of Colliers International.
The mature market, which is home to headquarters of both large and small companies but is largely an industrial market, also displayed its other advantage: stability among users.
Rooney Dashbach of Cushman & Wakefield said that while demand is down as the economy slows, most tenants don't have plans to pick up and move.
"A reduction in values has not hit the Mid-Cities; it keeps businesses specific to an area. The stability here gives confidence to this area," Dashbach said.
Landlords were able to increase rents three cents during the quarter to 60 cents per square foot, which put the going rate a nickel higher than it was a year ago. But it was still far cheaper than neighboring South Bay, where it hit 68 cents.
Industrial Market At a Glance
Inventory: 106 million square feet
Under Construction: 272,465 square feet
Asking Rents: 60 cents
- Ortho Mattress, based in Cerritos, leased a 97,078-square-foot building at 15300 Valley View Ave. in La Mirada for 45 cents per square foot for 10 years.
- Ta Chen International, an industrial steel company based in Taiwan, leased a 92,348-square-foot building at 12825 Carmenita Road in Santa Fe Springs for 72 cents per square foot for seven years.
- Material handing company Raymond Corp. leased an 89,499-square-foot building at 9939 Norwalk Blvd. in Santa Fe Springs for 60 cents per square foot for 10 years.
- Pro-Fleet Transportation, a Kansas City, Mo.-based trucking company, leased a 41,125-square-foot building at 9101 Sorenson Ave. in Santa Fe Springs for 60 cents per square foot for just over four years.
- Major home appliance maker Whirlpool Corp. leased a 40,000-square-foot building at 9415 Sorenson Ave. in Santa Fe Springs for 72 cents per square foot for five years.
- May Silk, a wholesaler of silk plants, flowers and trees, leased a 37,494-square-foot building at 14014 Gannet St. in Santa Fe Springs for 58 cents per square foot for more than three years.
- Process Fab, a manufacturer of industrial machinery, leased a 30,951-square-foot building at 13837 Bettencourt St. in Cerritos for 54 cents per square foot for one year.
- Advanced UV Inc., which manufactures water treatment equipment, leased a 23,781-square-foot building at 16350 Manning Way in Cerritos for 54 cents per square foot for little more than five years.
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