The San Gabriel Valley’s tight industrial market chugged along last quarter as vacancies remained low, rents rose again and users continued to grab space in the centrally located market.
With a 1.2 percent vacancy rate, the San Gabriel Valley tied with Central L.A. for the county’s lowest industrial vacancies, according to Grubb & Ellis Co. The performance indicated that as the economy and port traffic slows, the centrally located valley has advantages over the more distant Inland Empire.
The valley has a wider variety of users and property types, including general industrial and manufacturing, while the Inland Empire has vast volumes of warehouse and distribution space that is much more port-dependent.
“A lot of what’s coming through the ports is furniture which is directly impacted by the housing market and that also impacts retailers,” said Jim Center, senior vice president with Grubb & Ellis Co. “Out in the Inland Empire you have a lot of furniture companies and retailers, but the San Gabriel Valley is broader based so we’re not seeing the effect as much.”
Indeed, rents climbed four cents to 60 cents from a year ago, even as industrial sale and lease activity fell by 50 percent to about 1.35 million square feet from the previous quarter on par with a year ago. Net absorption also was down 1 million square feet to just over 403,703 square feet, an improvement from last year’s first quarter when net absorption dipped into the red.
The San Gabriel Valley office market’s vacancies rose slightly last quarter to 6.6 percent, but remained well under the Los Angeles County average of 10 percent. Asking rents did not move at all, remaining at $2.73 per square foot and $2.20 per square foot for Class A and Class B space, respectively.
Industrial Market At a Glance
Inventory: 174 million square feet
Under Construction: 587,000 square feet
Asking Rents: 60 cents
MAIN EVENTS
– Electronic recycling firm ARC International Corp. bought a 128,228-square-foot manufacturing facility in City of Industry for $12.3 million from First Industrial Realty Trust Inc. ARC had been leasing the property at 333 S. Turnbull Canyon Road since 2006.
– Brook Property Inc. acquired a 120,000-square-foot industrial property at 14440 E. Don Julian Road in the City of Industry from Mesa Centers. The buyer purchased the single-story building for $12.54 million, approximately $105 per square foot.
– California Umbrella purchased a 36,614-square-foot industrial building at 1480 E. Grand Ave. in Pomona for $3.2 million. The complex includes a 23,630-square-foot concrete tilt-up building as well as 3,200 square feet of office space.
– Consumer manufacturer Masco Corp. sold an industrial property totaling 871,024 square feet at 825 S. Ajax Ave. in City of Industry for more than $15 million. Private investment firm 82A Developments LLC purchased the property and has plans to demolish one of the existing structures and redevelop the land into an industrial park with small units for lease.
– Dragonis Investments LLC bought a warehouse property at 1561 Chapin Road in Montebello from BH Properties LLC for $7 million. The 89,600-square-foot building sits on more than four acres.
– Majestic Realty Retail, a division of development firm Majestic Realty Co., has preleased space at Marketplace at Grand Crossing-West, a 67,000-square-foot shopping center located at the border of City of Industry and Walnut. A 24 Hour Fitness health club will be the largest tenant with 33,000 square feet. Other tenants will include a Fresh & Easy Neighborhood Market, CVS, Chick-fil-A and Arco.
