220 million square feet
Under Construction: 710,000 square feet
Asking Rents: 65 cents
While the South Bay's industrial vacancy rate ticked down a tenth of a point in the first quarter to 2.8 percent, the real news was in the improving office market.
There, vacancies fell to 12.8 percent, down from 14.5 percent in the fourth quarter of 2006 and from 16.1 percent a year ago, according to Grubb & Ellis Co. The reduction in space pushed up asking rents, but as long as prices stay well below those being offered in West Los Angeles, brokers expect South Bay office space to remain a hot commodity.
The hot market was reflected in sale of the 573,000-square-foot World Trade Center in Long Beach to Legacy Partners for $260 per square foot the largest deal of the quarter in the South Bay.
The El Segundo and the Rosecrans Avenue corridor areas are experiencing strong leasing activity as buildings are being rejuvenated. Asking rents are at $2.20 per square foot, up from $2.08 a year ago, but still reasonable.
"Rosecrans is a lot like Century City," said Craig Meyer, senior vice president at Jones Lang LaSalle Americas Inc. "There are 3.5 million square feet of space all close to amenities and restaurants. The same product in Marina del Rey, Playa Vista or Santa Monica is now $3.50 to as high as $6.50 per square foot."
The current level of leasing activity should drive vacancy rates to as low as 6 percent in the El Segundo and Rosecrans submarkets by the end of the year and for lease rates to increase to between $2.68 and $3.50, Meyer said.
Meanwhile, robust port trade continues to force South Bay industrial vacancy rates as companies search for container storage space.
-Broadreach Capital Partners sold a 121,124-square-foot office building at 2151 Grand Ave. in El Segundo to Transwestern Commercial Partners for $29.1 million.
-Embarcadero Capital Partners sold a 118,686-square-foot office building at 1700 Walnut Ave. in El Segundo to Alliance Commercial Partners for $22.6 million.
-One Northrop Ave., a 515,714-square-foot building in the 86-acre Century Business Center in Hawthorne, was sold to Westport Properties Inc. for $25 million, or about $50 per square foot.
-The World Trade Center in Long Beach was acquired by Legacy Partners for $149 million, or $260 per square foot from G Reit Inc., an affiliate of Santa Ana-based Triple Net Properties. The 573,000-square-foot building at 1 World Trade Center on the Long Beach Waterfront, sold in the largest office deal in the history of the Long Beach market.
-UMA Enterprises Inc., an importer and wholesaler of home d & #233;cor goods, leased 116,263-square-foot warehouse facility at 775 W. Manville St. in Compton for 52 cents per square foot per month net. The building includes access to a Union Pacific Railroad line, truck high and ground-level loading doors.
-Midas Express of Los Angeles leased 234,771 square feet at 19914 Via Baron in Rancho Dominguez and will occupy the facility after some minor improvements are made. The landlord was PPF Industrial 19914 Via Baron LP.
-Forward Air, a provider of surface transportation to the air freight market, signed a four-year lease for $8 million, or 63 cents per square foot per month, at 18055 Harmon Ave. in the Dominguez Technology Center in Carson.
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