Industrial Market At a Glance
Inventory: 180 million square feet
Under Construction: 0
Asking Rents: 43 cents
After a dismal 2009, the San Gabriel Valley’s industrial market kicked off the new year with plenty of good news reflecting the rebound in international trade.
About 700,000 square feet of space was absorbed during the first quarter, a far cry from a year ago when the market gave back more than 2 million square feet, according to Grubb & Ellis Co. The vacancy rate decreased slightly to 4.1 percent, marking the first decline in vacancies in 15 months.
“We’re starting to see an increase at the ports and that’s sort of the bellwether for industrial,” said Brett Dedeaux, director, Binswanger/Realty Advisory Group and principal in industrial real estate holdings firm Dedeaux Properties. “The projections aren’t that strong, but at least the uncertainty is gone. Companies are starting to move forward.”
The asking rent remained flat last quarter, at 43 cents per square foot, while total sales and lease activity increased slightly to nearly 2.3 million square feet. That’s more than double the amount of activity during first quarter 2009.
Dedeaux said investment groups are stepping away from the sidelines and into tire-kicking mode, realizing that the slew of fire-sale bargains they’ve been waiting for may not be coming after all.
“They were thinking maybe a lot of these really nice industrial parks were going to go belly-up, banks would take them back, developers were going to go under, but that hasn’t materialized,” he said. “You are seeing some of that out in Riverside, but the infill areas have held their own.”
Activity in the San Gabriel Valley’s smaller office market also picked up last quarter as the net absorption climbed out of the red, ending at 143,490 square feet. Vacancies also decreased two and a half points to 10.6 percent, the market’s lowest rate since the end of 2008.
- Walnut Business Center LLC purchased a three-building industrial park in Diamond Bar for about $14 million. The property includes a 41,000-square-foot, single-story warehouse and two two-story flex buildings, one totaling 79,835 square feet and the other 56,090 square feet. Foremost Airport Vegas Ltd. sold the property.
- Optec Displays Inc., a manufacturer of LED displays, leased 33,965 square feet in an industrial building at 708-716 Nogales St. in City of Industry. The five-year deal is valued at more than $1.4 million. Landlord Dedeaux Properties has rented three of the four units in the new 71,460-square-foot building, completed in April 2009.
- Sen Won LLC bought three lots totaling more than 3.3 acres for $8.8 million from Reliable Wholesale Lumber Inc. The property, at 8614 Valley Blvd. in Rosemead, contains several buildings, including a 27,000-square-foot structure leased to Barr Lumber until March 2011. The buyer plans to eventually redevelop the whole property.
- C.E.G. Construction broke ground on a 190,000-square-foot industrial building at 14500 Nelson Ave. in the City of Industry. Troy Lighting, a producer of interior and exterior lighting products, currently located at 14625 Clark Ave. in Industry, will move into the facility upon completion.
- Choice Hotels International, which franchises more than 6,000 hotels around the world, opened a Comfort Suites hotel at 753 Glendora Ave. in La Puente. The property includes 44 suites, a workout room and a business center.
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