The South Bay and Mid-Cities industrial markets were two of the county's few bright spots last quarter, as brokers reported a slight uptick in business after one of the roughest periods in years. In fact, the two areas saw their vacancy rates fall even as the overall county industrial vacancy rate rose.
Vacancies dipped a half-point in Mid-Cities to 1.8 percent the most dramatic decline in all markets while the South Bay vacancy rate inched down one-tenth of a point to 2.4 percent.
Brokers said that many buyers in the South Bay and Mid-Cities markets, which serve the ports, are waiting to see what happens with the economy. But others are consolidating operations.
"When the market is red hot, a buyer will take space where they can to get in," said David Bales, senior vice president of the South Bay office for Lee & Associates. "But now that market has chilled, buyers are looking around to see how they can cut costs."
One example is ATV Inc., an automobile tire distribution company. It leased a Cerritos industrial building for nearly $1.2 million from WCV Commercial Properties, a Chicago real estate investment company. ATV plans to consolidate its operations from two warehouses into the 71,712-square-foot building at 16201 Commerce Way in the the Cerritos Distribution Center.
"This is a good midpoint for them because they can be close to the ports where some of their tires come in and be able to distribute them to their shops in Southern California," said broker Stephen Calhoun, of Colliers International, which represented WCW.
Industrial Markets At a Glance
Inventory: 325 million square feet
Under Construction: 747,654 square feet
Asking Rents: 64 cents (South Bay); 57 cents (Mid-Cities)
- Cleveland-based Lincoln Electric, a manufacturer and distributor of welding equipment and supplies, leased a 53,176-square-foot industrial facility at 12979 Sandoval St. in Santa Fe Springs from owner A.C. Coral Kay Trust. The lease is for 11 years and valued at $5 million.
- Metal parts supplier Castle Metals Aerospace, owned by Franklin Park, Ill.-based A.M. Castle Co., signed a four-year lease renewal valued at $2.67 million with landlord Kong Family Trust/YWK Corp. for a facility that sits on 5.7 acres at 14400 S. Figueroa St. in Gardena.
- ATV Inc., an automobile tire distribution company, leased an industrial building in Cerritos for nearly $1.2 million from WCV Commercial Properties, a Chicago-based real estate investment company. ATV plans to consolidate its operations into the 71,712-square-foot building at 16201 Commerce Way.
- The U.S. General Services Administration has signed a 15-year lease for a 32,980-square-foot building at 1700 E. Grand Ave. in El Segundo with Mar Ventures Inc. The GSA, the federal government's asset and commercial real estate manager, is having Torrance-based developer Mar construct the $7 million facility, which will house where new members of the Armed Forces will be processed.
- Bergen Shippers, a warehousing service provider based in North Bergen, N.J., has signed a five-year lease at 43 cents per square foot with landlord RREEF for a larger space in Commerce. The company, which was in an adjacent 27,710-square-foot building for the last two years, will relocate to an 89,938-square-foot property at 6000 Rickenbacker Road.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- REGIONAL REPORT
- SOUTH BAY/MID-CITIES: Traffic at Port Buoys Brokers’ Optimism
- SOUTH BAY/ MID-CITIES: More Office Space Comes Back on Line Despite Industrial Strength
- SOUTH BAY/MID-CITIES: Port Slowdown Continues to Rock Area
- SOUTH BAY: Market Gives Back Space After First Quarter’s Absorption
- Ripple Effect From Slowdown at Ports
- SOUTH BAY/MID-CITIES: Port-Reliant Businesses Like Slips in Rates
- SOUTH BAY/ MID-CITIES: Industrial Strength Gap in Submarkets