The booming south Los Angeles County industrial market has provided an unexpected windfall to business owners David and Grace Tung.
The couple, who operate Concord Industries in the City of Industry, recently bought an empty warehouse building in Santa Fe Springs with the intent of renting out half the facility and moving their tape manufacturing operation to the other half. But before they could even move into the property it had appreciated so much they decided to sell it. It was purchased by the Department of Registrar-Recorder/County Clerk of Los Angeles County.
The 99,494-square-foot building at 12680-12686 Corral Place sold for $119 per square foot, which broker Mark Repstad of Binswanger/Realty Advisory Group said is likely a record sale for an industrial building in Santa Fe Springs. He cited a lack of inventory in the area as the prime reason for the price.
The sellers would not say how much they had spent to buy the property. However, "Previous comps for buildings were in the $80s to low $90s," said Repstad, who works out of Binswanger's downtown Los Angeles office and with his brother, John, represented the Tungs.
Concord is instead moving to Vernon, where the Tungs purchased an 89,740-square-foot building for $8.2 million, or about $95 per square foot, said Repstad, who also represented the couple in that purchase.
The facility at 2565 Fruitland Ave. was built in the 1990s, comparatively new for the area. Repstad said his clients got a good price, considering the 28-foot ceilings, which are uncommon in Vernon.
Clyde Stauff of the Anaheim office of Colliers International Property Consultants Inc. represented Los Angeles County in its purchase of the Santa Fe Springs building.
John McMillan, Jeff Sanita and Tom Cherry of the downtown Los Angeles office of Cushman & Wakefield Inc. represented the seller of the Vernon building, 2465 Fruitland Ave. LLC.
CB Richard Ellis Group Inc. has had a busy month. The commercial real estate services firm acquired Holley Blake, a British industrial real estate firm, for $22 million, and The Polacheck Co. of Wisconsin for $20 million.
The El Segundo company's purchase of the 10-year-old British industrial real estate firm is expected to give CB a leading position in the UK market. The company is also seeking a better foothold in Western Europe, where it already has offices in Belgium, Austria, Denmark, France, Germany, Greece, Ireland and Switzerland.
The Polacheck Co., with three offices and 117 staff members, has been a CB affiliate for 10 years and a commercial real estate company since its 1954 founding. The purchase is part of CB's initiative to purchase affiliates in key markets to extend the company's presence across the U.S.
Shortly before these deals were announced in early July, the company announced the closure of a $600 million revolving credit facility. Earlier in June, the company redeemed its outstanding senior subordinated notes, removing $163 million in high-interest debt from its balance sheet.
Company spokesperson Steve Iaco said the financial deals did not facilitate the subsequent purchases. "They came predominantly from cash flow, with a little short-term borrowing," he said.
Home Sweet Home
The California Department of Housing and Community Development announced last week that $211 million in Proposition 46 funds will be doled out to 42 counties to provide housing for needy residents.
The Los Angeles region's take is $43 million, which will provide housing for 2,577 families and individuals. These funds include $20 million to create affordable apartment homes through the Multifamily Housing Program, $6 million in Workforce Housing Reward Program money and $10 million in awards through the Emergency Housing Assistance Program.
The Multifamily Housing Program provides low-interest loans for the construction of affordable apartments and rehabilitation of existing units. Three projects in L.A. County are being sponsored by Housing Corp. of America Inc. and In Site Development LLC; AMCAL Multi Housing Inc.; and the Los Angeles Community Design Center. These companies will be recipients of the grant money and will have to raise additional money, said Janet Huston, spokesperson for the housing and community development department.
The City of Los Angeles is separately sponsoring four projects with funds from CalHome Building Equity & Growth in Neighborhoods. The City of Santa Monica is also sponsoring one. The Prop 46 money will also fund 11 affordable housing projects and nine emergency housing projects in L.A. County.
The proposition, also known as the Housing and Emergency Shelter Trust Fund Act, passed in 2002 and authorized a $2.1 billion dollar bond measure to help fund the construction, rehabilitation and preservation of affordable rental housing, emergency shelters and homeless facilities. The money is also used to provide down-payment assistance to low and moderate income first-time home buyers.
Commercial Real Estate Seminar
Long Beach-based business consultants TBS Sales LLC specializes in "commando" style turnarounds or aid in quickly launching a new company.
But when company president Terri Ghio started looking at alternatives to stock or residential real estate investing to grow her own retirement nest egg, she discovered a dearth of resources for average individuals who want to learn how to invest in commercial real estate. And that presented a business opportunity.
What began as a group of 20 friends and family gathering to seeking investment strategies into the commercial real estate world has now evolved into a TBS-sponsored seminar series that launches July 31 in Long Beach.
Area experts for the afternoon event, which runs from 1:30 p.m. to 7 p.m., include Jeff Spinelli of F & M; Bank, Stephen Lampe at RE/MAX Commercial and Gary Pepp of Preferred Real Estate Finance. They will join author Jack Cummings, who has published more than 20 books on the real estate market. The cost is $499 for one person and a guest. Call (562) 437-4769 for reservations.
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