Industrial Markets At a Glance
Inventory: 331 million square feet
Under Construction: 0
Asking Rents: 47 cents (Mid-Cities); 52 cents (South Bay)
Activity has begun to pick up in the South Bay industrial market, with more businesses looking to lease space, though things are still quiet in the Mid-Cities area.
All in all, brokers said the recent activity – linked to rising port traffic over the last several months – has been heartening.
“What we think happened is that a lot of people got through 2009 and said it can’t possibly be any worse,” Chuck Hunt, executive managing director at the L.A. office of Grubb & Ellis Co., said of the South Bay area.
Even so, South Bay vacancies have yet to register the improvement and rose three-tenths of a point to 2.7 percent, while the Mid-Cities region continues to hold the highest rate in the county at 5.1 percent. Rents are down a cent or two since the end of the year in both the South Bay and Mid-Cities, according to Grubb & Ellis.
The Mid-Cities market, which historically has been weaker than the South Bay given its greater distance from the ports and older warehouse stock, has been slower to bounce back. Still, despite the sluggishness, the market has seen some deals.
One example is Safety Zone, which leased a 67,000-square-foot industrial building at 16110 Manning Way in Cerritos to replace its smaller nearby warehouse.
Terms of the lease were not disclosed, but broker Stephen Calhoun hinted that the safety equipment distribution company took advantage of the economy to get a good deal.
“They had many choices of buildings, and because of that, the concessions are much more in favor of the tenant than the landlord,” said Calhoun, a broker at the Commerce office of Colliers International.
- Murad Skincare purchased a 57,000-square-foot warehouse at 1340 West Storm Parkway in Torrance. The company paid about $7.2 million, or about $126 per square foot, to seller Storm Properties Inc. for the two-year-old property.
- UDT Distribution Corp. signed a lease for a 120,000-square-foot headquarters space at 801 W. Artesia Blvd. in Compton. The logistics firm is locked into a five-year lease with landlord AMB for the warehouse, valued at $2.51 million. The deal includes six months of free rent, and a rate of 25 cents per square foot for the first year and 35 cents per square foot for the second, with a one cent jump each year thereafter.
- Sales and marketing group Solaris Paper expanded its lease at 6750 Artesia Blvd. in Buena Park. Prior to signing the lease, Solaris occupied 275,000 square feet of the distribution center. The paper company will occupy all of the 447,000-square-foot space, owned by ProLogis.
- Epson America Inc. renewed its lease on an 180,000-square-foot space at 18300 Central Ave. in Carson. The deal between the technology company and landlord Carson Cos. is for five years and three months. The industrial office was recently renovated to include improved offices and lavatory space.
- Safety Zone leased a 67,000-square-foot industrial building at 16110 Manning Way in Cerritos from Mead Carmenita Partners. The deal represents an upgrade from the safety company’s current 40,000-square-foot building in Cerritos.
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