RUSSELL A. JACKSON
The San Gabriel Valley's already-hot industrial market continued to sizzle during the second quarter.
Of the roughly 129 million square feet in the market, just 6.8 million are available, or 5.3 percent, down from 6.1 percent at the end of the first quarter, according to Cushman & Wakefield of California. Particularly tight is the El Monte/Whittier submarket, where the industrial vacancy rate is 1.6 percent.
"It's a continuation of the same story as in the first quarter," said Jim Center, senior vice president at Grubb & Ellis Co.'s City of Industry office. "Demand remains strong across a broad spectrum of properties. Right now we're seeing multiple offers on properties."
Center attributes much of the strength to the improving economy and "a big Asian influence that gives this market an advantage over other areas of Southern California. (Asians involved in trade with Asia) tend to live in the area, and that has a big impact on this portion of the market. Right now, it's the hub of the wheel in terms of manufacturing and distribution between L.A. and San Bernardino County. It's the center point for activity that goes in either direction."
Added Phil Lombardo, vice president at Trammell Crow Co.'s L.A. office: "In terms of larger spaces 150,000 square feet and up there's very, very little, if anything, out there. And there's hardly anything modern. Majestic Realty had until recently a fair amount of second-generation buildings available because of the exodus of some users looking for better space in other markets. But that space has all been released."
Illustrating the hunger for industrial space, Lombardo cites a spec property built by O'Donnell Development in City of Industry, all 256,000 square feet of which were leased, pre-completion, to Hills Pet Foods. "There's immediate absorption. It's a real good picture," Lombardo said.
Among the most closely watched properties is a massive speculative project in the City of Industry called The Plantation. Considered the premier example of its type in the market, the five-building, 70-acre development in the 500 block of Grand Avenue being built by Koll Co. is already 50 percent preleased, says Frank Geraci, senior vice president with CB Richard Ellis' City of Industry office.
One of the biggest industrial deals of the quarter was signed at The Plantation, where CTX Monitors leased just over 320,000 square feet 40,000 square feet of it for office space, and with a purchase option.
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