Home Goods Move In

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Another piece of American Apparel’s real estate portfolio has changed hands as the company winds down under bankruptcy protection.

The latest piece of property to turn over is a 220,000-square-foot warehouse in La Mirada that downtown-based American Apparel had leased as its worldwide distribution center.

Daiso California is now set to move into the property, which is owned by Prologis Inc. The division of Japanese home goods retailer Daiso Industries Co. Ltd. last month signed a six-year lease for the space at 16400 Trojan Way, according to Prologis’ broker, Christopher Sheehan of Colliers International.

The deal is worth roughly $12 million, Sheehan said.

American Apparel’s lease was set to expire in July, but Prologis negotiated to cut that term by 1½ months after the clothing manufacturer filed for bankruptcy protection in November.

The apparel company has already shed other major properties. T-shirt maker AST Sportswear Inc., based in Brea, took over the lease for American Apparel’s dyeing and finishing plant in Hawthorne, while Compton-based Broncs Inc. purchased an American Apparel textile mill in Garden Grove.

The clothing maker’s 110 retail shops nationwide have emptied out, and landlords are seeking new tenants. The fates of the American Apparel factories in South Gate and downtown were still unclear last week.

Meanwhile, American Apparel is set for a second life as part of Montreal-based Gildan Activewear Inc., which purchased the company’s intellectual property and some assets for $88 million in January.

Sheehan, assisted on the deal by Nicolas Vranka and Connor Reeves, said the space sat on the market for a couple of months before Daiso California landed the deal – a short turnaround fueled by high demand in the southeast Los Angeles County submarket known as Mid-Counties, where the vacancy rate is below 1 percent.

“Tenants have to move quickly when they see a property they like, because it likely won’t be available for long, and they’ll be competing with other potential tenants,” Sheehan said. “Market rents for both Class A and Class B have surpassed all-time market highs. … It’s a landlord’s market.”

The southeast county is particularly attractive for tenants looking for proximity to other parts of Southern California, he added.

“They can hit the whole Southern California population base within a two-hour drive,” he said.

Cushman & Wakefield’s Mike Foley, Chuck Berger, Ryan Bos, and Dave Hess represented Daiso in the deal, but declined to comment. According to the retailer’s website, the brand operates 36 shops in Southern California, where it sells low-price household goods such as spatulas, wrapping paper, and gardening shears. Its Japanese footprint spans 2,680 stores and the parent company has more than 4,000 locations globally.

San Francisco-based Prologis is one of the world’s largest industrial real estate owners, with 678 million square feet worldwide, according to its website. That includes 31 million square feet across 254 buildings in Los Angeles and Orange counties.

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