Major events in Los Angeles County commercial and industrial submarkets in the third quarter.
After a mild recovery earlier this year, the South Bay and Mid-Cities industrial markets contracted a case of the summertime blues.
Vacancy rates in the Mid-Cities stayed the highest in the county at 5 percent, while the South Bay saw vacancies rise two-tenths of a percent to 3 percent, according to Grubb & Ellis Co. There also was little change in asking rents; in Mid-Cities they decreased by one cent to 42 cents and in the South Bay they rose by one cent to 53 cents.
“The market is still lethargic. We’re fairly flat, kind of rumbling along,” said Jim Biondi, senior vice president at Grubb & Ellis Co. “I still don’t think we’ve turned the corner.”
Brokers said activity was slow because many businesses took advantage of the market’s rebound at the beginning of the year and signed new leases then. Also, decreased container activity at the ports following the pre-holiday surge could explain the quarter’s lethargy.
“We saw a dramatic increase in container activity at the ports,” said Howard Schwimmer, senior managing partner at Rexford Industrial. “That’s tapered off now that people are fully stocked for the holidays.”
That also could account for the rise in the vacancy rate in the South Bay, which is traditionally stronger than its Mid-Cities neighbors because of its proximity to the port. But Steve Calhoun, a broker at the Commerce office of Colliers International, said the Mid-Cities market will get just as soft as the South Bay in the coming year.
“The best thing going for the Mid-Cities is that there’s no land for development,” he said. “It won’t be flooded with new inventory.”
Industrial Markets At a Glance
Inventory: 331 million square feet
Under Construction: 0
Asking Rents: 42 cents (Mid-Cities); 53 cents (South Bay)
- A 5.5-acre parcel in Carson was leased to MV Transportation, a Bay Area passenger transportation services company, in July. MV Transportation paid $5.5 million for a 10-year lease on the property at 21222 S. Wilmington Ave., owned by Hager Pacific Properties and SoCal Industrial Partners LLC. The parcel includes a 22,000-square-foot maintenance and office building and a five-acre paved yard. MV Transportation signed an $86 million contract with the L.A. Metropolitan Transit Authority in June to service its buses.
- RPM Transportation, a traffic engineering and consulting firm, renewed its lease for a warehouse in Santa Fe Springs in August. The 174,000-square-foot property is owned by Golden Springs Development Co. RPM, based out of Brentwood, Tenn., will stay in the building in the Golden Springs Business Center at 13225 Marquardt Ave. for another three years. Terms of the deal were not disclosed.
- Saber Avalon LLC bought a 71,900-square-foot property in Gardena from Eugene Halperin 2003 Trust in August. The industrial land at 15000 S. Avalon Blvd. has a fenced-in yard and water, electrical and lighting capabilities. The price was unavailable.
- Watson Land Co. leased a 103,000-square-foot warehouse in Carson to Coby Electronics. The Lake Success, N.Y., consumer electronics manufacturer leased the space at 989 E. 233rd St. for an unknown price.
- Spectrum Bags Inc., a maker of plastic grocery bags, renewed its lease at 12850 Midway Place in Cerritos. Spectrum signed up for five years at the 113,000-square-foot property from Bechler Corp. at 50 cents per square foot.
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- SOUTH BAY/MID-CITIES: Port-Reliant Businesses Like Slips in Rates
- SOUTH BAY/ MID-CITIES: Lease Activity Rises in Mid-Cities as Lower Rates Draw Businesses
- SOUTH BAY/MID-CITIES: Port Slowdown Continues to Rock Area
- SOUTH BAY/MID-CITIES: Traffic at Port Buoys Brokers’ Optimism
- SOUTH BAY: Market Gives Back Space After First Quarter’s Absorption
- Ripple Effect From Slowdown at Ports
- SOUTH BAY/ MID-CITIES: Industrial Strength Gap in Submarkets
- SOUTH BAY/ MID-CITIES: More Office Space Comes Back on Line Despite Industrial Strength