Hosting an open house to market a single-family home? No big deal. Do the same for a 369,000-square-foot warehouse in the South Bay? That simply isn’t done.
But that’s what broker and developer Eric Knirk of Fremont Associates in Torrance is doing to try to lease the warehouse property in a market that slowed to a crawl over the past three months.
“For the last 10 years, I don’t think we’d be having an open house in that (building) because we’d either be talking to people or we’d have a pulse that there were X number of companies looking for space,” Knirk said. “Now we’re doing everything we can including an open house, because there’s not a lot happening.".”
The numbers support that observation. The South Bay’s industrial vacancy rate rose by nearly a half-point to 6.2 percent in the quarter as sales and leasing dropped by 35 percent, according to Jones Lang LaSalle Inc.
Blame it on the ports.
The South Bay and Mid-Cities industrial markets are locations for warehouses that hold cargo traffic from the Los Angeles and San Pedro ports. But retailers, assuming consumers will be stingy this year, have cut back on their holiday imports. Traffic dropped at both ports in July and August, when retailers usually start shipping holiday merchandise.
Jim Biondi, a senior vice president at Grubb & Ellis Co. in Torrance, said the mood in the region has shifted from optimism at the beginning of the year. “The economy is not getting much better. Most people are fairly negative, or they’re certainly not in expansion mode,” he said.
Barry Hill, a senior vice president at Jones Lang LaSalle, expects general uncertainty about the economy will keep the region’s leasing activity low at least through year’s end.
- Real estate investment trust Crescentini Trust purchased a 92,000-square-foot warehouse at 21112 S. Figueroa St. in Carson for $11.8 million. Crescentini owns a nearby building and was one of several parties interested in the property. The seller was apparel importer and distributor DRG Cal LLC, which occupied about half of the building and leased out the other half.
- A real estate investment fund in San Antonio, Admiral Capital Real Estate Fund, purchased a 120,000-square-foot office building at 1700 E. Walnut Ave. in El Segundo for $21.6 million. The deal brokered by CBRE Group Inc. closed July 5. The property, which is 90 percent leased, had been on the market for nearly two years. The seller was Lakewood, Colo., investment group Alliance Commercial Partners LLC.
- Terreno Realty Corp., a San Francisco real estate investment trust, purchased a 70,000-square-foot office and warehouse property at 19601 Hamilton Ave. in Torrance for $12.4 million. The building is fully leased by FedEx for five more years. The seller was private investor Hamrock LLC.
- De Well logistics, a unit of Shanghai’s De Well Container Shipping Corp., leased a 150,000-square-foot warehouse at 2910 Pacific Commerce Drive in Rancho Dominguez. De Well moved into 120,000 square feet in September and will take the remaining 30,000 square feet in January. The $2.8 million, 45-month deal includes two months of free rent.
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