Thanks to its central location and steady stream of users in the solid import-export business, the San Gabriel Valley's office and industrial markets both stayed strong last quarter.
Industrial sale and lease activity more than doubled during the April-June period to 2.7 million square feet, according to figures from Grubb & Ellis.
Vacancies dropped slightly to 1.6 percent while rents inched up a penny, to 57 cents, compared to 52 cents during the same period a year ago.
"It's an infill area, which makes it tough for anyone looking to expand or come into the market to have a lot of choices," said Jason Chao, vice president, brokerage services, CB Richard Ellis Group Inc. "They're running into the higher rents. Landlords are seeing there isn't a lot of supply out there and not a whole lot they're competing against."
More than 1.2 million square feet of industrial space is currently under construction in the region, but that new product may not be enough to make a dent in a market that is home to more than 184 million industrial square feet.
"Two or three new projects take up a good chunk of that new construction," according to Chao. "I don't see the new space as having a tremendous effect given the overall base."
One of those new projects is Majestic Realty's mega-industrial center Grand Crossing in City of Industry, which will total 6.45 million square feet at buildout. Much of the project is already complete. Last quarter, printing industry supplier Pitman Co. signed a 10-year lease for 125,000 square feet of warehouse and distribution space at the development.
The region's office market, which includes only about a tenth of the square footage that makes up the industrial market, was also on a roll last quarter. Vacancies fell by an entire point to 6.6 percent, down from 9.1 percent during the second quarter of last year.
Class A asking rents climbed 11 cents to $2.65 while Class B rents increased 5 percent to $2.30 per square foot. The upward trend shows no sign of slowing given the fact the San Gabriel Valley has no new office square footage in the pipeline.
- Resilient Floor Covering Pension Fund sold a 36,200-square-foot industrial building in City of Industry for $4.4 million to Campbell & Associates, a logistics and distributions company. The property is located at 13031 Temple Ave.
- Mattress manufacturer Spring Air Partners subleased its 47,500 industrial space at 15110 Don Julian Road in Industry to media product manufacturer and distributor King Bird Inc. The 56-month sublease's rental rate is 57 cents per square foot on a gross basis, or a total consideration of $1.58 million.
- Cosmetics company Physicians Formula Inc. signed a 45-month, $1.7 million lease for 72,000 square feet of warehouse space at 753 E. Arrow Grand Circle in Covina. The landlord is 753 Arrow Grand Circle LLC.
- United Logistic Solutions, a supply chain firm, inked a five-year lease for 59,800 square feet at 811 Sentous St. in Industry from Invesco Realty Advisors. The rental rate is 44 cents per square foot triple net with a total consideration of just under $1.7 million.
- Pitman Co., a supplier of graphic arts supplies, equipment and services to the printing industry, signed a 10-year lease for 125,000 square feet of warehouse and distribution space at Majestic Realty Co.'s Grand Crossing industrial park in east Industry.
Majestic also leased 100,000 square feet of office, warehouse and distribution space at 2727 Workman Mill Road in Industry to supply chain management services firm Topocean Group for five years.
Industrial Market at a Glance
184 million square feet
Under Construction: 1.2 million square feet
Asking Rents: 57 cents
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