99 Cents Only Relocating Headquarters in Massive Lease

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Deep-discount retailer 99 Cents Only Stores Inc. has signed a mammoth lease for 615,000 square feet in the City of Commerce – the largest industrial infill lease ever signed in Los Angeles County.

The company will relocate its corporate headquarters to the Garfield Corporate Center, still under construction and expected to be completed in about a month. The project is being developed by KTR Capital Partners, a private equity firm out of New York.

Terms of the deal were not disclosed, but the going rate for modern Class A industrial space from the South Bay to the Central Cities of Commerce and Vernon was in the range of 55 to 65 cents a square foot a month. At an average rate of 60 cents a square foot, a 10 year lease for 615,000 square feet would be valued at nearly $44.3 million.

The Garfield facility, the largest free-standing industrial building constructed in greater Los Angeles in the last decade, is located about half a mile from entrances to the 5 Freeway and about a mile from the 710 Freeway. It’s also about five miles from 99 Cents Only’s headquarters at 4000 Union Pacific Ave. The company will continue to occupy that 880,000-square-foot building, constructed in 1950, for training and other uses.

As of October, 99 Cents Only, acquired by L.A. private equity firm Ares Management and taken private in 2011, had 332 stores, with 238 in California, 44 in Texas, 33 in Arizona and 17 in Nevada.

In a statement last fall after the company laid off 160 workers, the deep-discount retailer said it would do whatever is necessary to “streamline our operations in order to keep costs in line with our competitors, better control sourcing of our merchandise and execute on our strategy to grow our store numbers significantly over the next few years.”

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