The San Gabriel Valley’s industrial market sat still last quarter, as importers continued to wait for business to pick up.
The July-September period ended with industrial vacancies at 4.3 percent, the same as the prior quarter, according to figures from Grubb & Ellis Co. But that rate is up from 2.5 percent during the year-ago period.
During the high-flying days of its infill market, the San Gabriel Valley had become accustomed to having all of its big-box buildings consistently occupied. Now, of course, things have changed.
“Retail sales being slow has had a pretty direct impact on a lot of the importers here,” said Jason Chao, vice president at CB Richard Ellis Group Inc. “We’re going back to more of a norm than the situation we were in two years ago, when as soon as something became vacant it was immediately occupied. Six months (between tenants) is fairly standard in any market, and now we’re seeing that.”
The valley’s industrial asking rents fell 2 cents to 44 cents per square foot, 11 cents off from the year-ago period, and 4 cents below the county average. On top of that, landlords have been offering sweeteners to retain or woo tenants.
“On an average three-to-five-year lease deal, you’re seeing anywhere from three to six months of abated rent,” Chao said. “A lot of the landlords want to ride this out, keep their spaces filled, and get cash flow in place for the next few years until the economy rebounds.”
But it wasn’t all bad news. The net absorption rate, though still a negative 57,656 square feet, substantially improved along with sales and lease activity.
Industrial Market At a Glance
Inventory: 179 million square feet
Under Construction: 0
Asking Rents: 44 cents
Investment entity 14730 Don Julian Road LLC bought a 100,000-square-foot industrial building at 14730 Don Julian Road in City of Industry for $7.4 million from Gale Jullian LLC. Food company Ming Hong International Inc., which the buyer owns, will occupy the whole building.
The Irwindale Community Redevelopment Agency acquired an industrial property at 5257 Vincent Ave. from a family trust for approximately $3 million. The existing tenant, American Medical Response, will continue to occupy the 2.8-acre property, which includes a 10,865-square-foot building and a 6,750-square-foot vehicle-service facility.
Puente Hills Hyundai opened a new dealership at 17621 E. Gale Ave. in City of Industry. The 49,621-square-foot facility is on six acres on the north side of the Pomona (60) Freeway between Azusa Avenue and Fullerton Road.
Johnson Hardwood Flooring renewed its lease of 64,900 square feet at 825 Sentous St. in City of Industry for five years for an undisclosed amount. Invesco Real Estate is the landlord.
The Walnut City Council settled its lawsuit against neighboring City of Industry over billionaire Ed Roski Jr.’s proposed National Football League stadium. Under terms of the settlement, Industry could end up paying as much as $24.7 million to Walnut over 30 years. Walnut filed suit against Industry and Roski’s Majestic Realty Co. in March, contending Industry should not allow the project to go forward without a full environmental impact report.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- SAN GABRIEL VALLEY: Port Slowdown Spurred Wave of Vacancies
- SAN GABRIEL: Strong Infill Market Bears Burden of Downturn
- SAN GABRIEL VALLEY: Cheap Prices Tempt Industrial Buyers
- SAN GABRIEL VALLEY: City of Industry Paces Recovery That Has Run for Four Quarters
- SAN GABRIEL VALLEY: Market Remains Strong Amid High Demand
- SAN GABRIEL VALLEY: International Trade Fuels Positive Absorption
- SAN GABRIEL VALLEY: Industrial Tenants Wary Over Weaker Economy
- SOUTH BAY/MID-CITIES: Port Slowdown Continues to Rock Area