122 million square feet
Under Construction: 541,000 square feet
Asking Rents: 55 cents
High quality building stock and traffic from the ports of Los Angeles and Long Beach kept vacancies near capacity and rent prices high in the Mid Cities region during the first quarter.
Industrial vacancies declined to 2.2 percent in the region, which includes Buena Park, Cerritos and La Mirada, from 2.3 percent in the fourth quarter of 2006 and 2.5 percent a year ago. Rents remained at 55 cents per square foot, according to Grubb & Ellis Co.
Stephen Batcheller, a senior vice president in the institutional properties group at CB Richard Ellis Group Inc., said the area's vacancy rates reflect the region's amenities.
"It's the absolute geographic center of Southern California," Batcheller said. "It tends to have a more modern product, the nearby ports, a good labor base of both white- and blue-collar workers and access to five highways."
Sales and lease activity increased to 1.9 million square feet from 1.4 million square feet in the fourth quarter but was still lower than the 2.3 million square feet recorded in the first quarter of last year.
Batcheller thinks that industrial tenants were scared away by rising rent prices last quarter but re-signed Mid Cities leases after realizing tight market conditions exist across Southern California.
"There's been a delay. It was sticker shock," Batcheller said. "As leases ended they saw that rents were up and looked at other areas but found the same thing was happening."
The increased net absorption rate could also be an indicator that industrial space will come with a higher price tag. "The supply is dwindling," said Steve Calhoun, a senior broker at Colliers International.
-Western Realco Inc. acquired an 85,912 square-foot industrial building from Mitsubishi International for an undisclosed price in Santa Fe Springs. The current tenant of the building on 11919 Smith Ave. is Primary Steel, a supplier of steel plate and carbon coil products.
-8 Net Inc. signed a 63-month lease with a starting rate of 49 cents with Muller-Alondra LLC for an 87,635 square-foot building at 13140 Alondra Blvd. in Cerritos.
-Watkins and Shepard Trucking Inc. sold a 7,005-square-foot industrial building to the Dominick and Barbara Chila Trust for $2.5 million. The 1.9-acre property is at 14683 Industry Circle in La Mirada.
-Felix Lighting Corp. signed a five-year lease with the Achuck Family Partnership for $1.6 million. The 58,146-square-foot property is at 17120 Valley View Ave. in La Mirada.
-Applied Products, an adhesives company, signed a five-year lease with a five-year option in the Golden Springs Industrial Park. The 18,000-square-foot space leased for an undisclosed sum.
-Miguel and Candelaria Baca purchased a block building at 8107 Phlox St. from Martin and Barbara Orloff. The 4,200 square-foot structure in Downey was $750,000.
-P & N; Cabinets LLC signed a three-year lease with KPBC Investments LLC for an 8,500-square-foot block building on 14008 Shoemaker in Norwalk. The terms were 68 cents per square foot with a 2 cent annual bonus.
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