After several quarters of solid growth, the San Gabriel Valley’s industrial market showed signs of weakening last quarter, due in part to concerns over an economic slowdown.
Asking rental rates fell by four cents since the second quarter to 53 cents during the July-September period, their lowest in more than a year, according to figures from Grubb & Ellis. Vacancies climbed to 1.9 percent, compared with 1.6 percent during the prior quarter.
“Some people are taking a wait-and-see attitude on making real estate decisions until they can get a clear handle on what’s going to happen to the local economy,” said Jim Center, senior vice president, Grubb & Ellis Co. “We’re starting to see a little bit of slowdown in activity in the ports and we’re not quite sure how it’s going to all play out.”
The market gave back 492,000 square feet as compared with absorbing 1.6 million during the second quarter when Williams-Sonoma took over 1.1 million square feet of warehouse space in City of Industry.
The lack of product, especially big-box space, in the San Gabriel Valley, might also be contributing to the slowdown and sending potential tenants east. “Clients have been going out to the Inland Empire because larger products are available there,” Center said. “There’s more inventory being built out there than anyplace else because of the availability of land.”
Just 1.4 million square feet of industrial space is currently under construction in the San Gabriel Valley, which will only increase the region’s base of 184 million square feet by a fraction of a percent.
Industrial sale and lease activity ended last quarter at 2.6 million square feet, just slightly lower than the previous quarter. A good chunk of that square footage can be attributed to several relatively large sales.
Among them, third-party logistics provider Corporate Logistics bought a 221,000-square-foot manufacturing warehouse in City of Industry from COI Midwest Investments for approximately $13.8 million.
The San Gabriel Valley’s much smaller office market remained relatively steady last quarter. Class A asking rents were up a nickel to $2.70, while the region’s vacancy rate decreased a tick to 6.5 percent, well below L.A. County’s average of 9.2 percent.
Cornerstone Real Estate Advisers LLC bought a 174,065-square-foot office complex for $58 million, or $333 per foot, the highest price per square foot ever paid in the West Covina office market.
MAIN EVENTS
– Corporate Logistics acquired a 221,000-square-foot manufacturing warehouse at 900 Turnbull Canyon Road in the City of Industry. Corporate Logistics bought the property from COI Midwest Investments for approximately $13.8 million.
– Home furniture importer Import Direct Inc. signed a multi-year lease for 75,000 square feet of warehouse and distribution space at 15801 E. Valley Blvd. in City of Industry in a deal valued at more than $1.2 million. Developer Majestic Realty Co. is the landlord.
– Women’s shoe distributor L & C; Management, LLC purchased a 43,356 square-foot industrial building at 17181 Gale Ave. in City of Industry for $5.8 million from Gale Investments LLC. The building can be divided into three separate units.
– First Industrial Investment sold a 133,000-square-foot industrial property at 14300 Bonelli St. in City of Industry to Blackrock Realty Advisors for $13.27 million.
– Cornerstone Real Estate Advisers bought the Lakes, a Class A complex, for $58 million, or $333 per foot, the highest price per square foot ever paid in the West Covina office market.
Lizbeth Scordo
