In a significant boost for the regional automotive industry, Mercedes-Benz USA LLC has signed the largest infill industrial lease deal in Los Angeles County in a generation, taking more than 1 million square feet at a former Boeing Co. site in Long Beach.
Mercedes, which brings in more than 50,000 vehicles thought the Port of Long Beach each year, will take two buildings in a 52-acre campus owned by Irvine’s Sares Regis Group.
Brian DeRevere, a senior vice president at commercial real estate services firm CBRE Group Inc., which represented the landlord, confirmed the transaction, which had been in the works since late 2012.
Mercedes officials would not comment on the lease.
DeRevere would not disclose how the car company plans to use the space but sources familiar with the lease said the site would be used as a service and preparation center for vehicles coming through the port.
Mercedes, a unit of Stuttgart, Germany’s Daimler AG, will move into two buildings of 575,000 and 434,200 square feet. Both were built in 1958 and will be brought up to date by the car maker.
Terms of the deal were not disclosed, but according to data provided by CoStar Group Inc., the average monthly rent for the facility is 50 cents a square foot. That would amount to an annual rent of more than $6.5 million.
The site, at 4501 E. Conant St., was vacated by Boeing in 2006 and sold to Sares Regis in October 2012. It is across the street from Sares Regis’ 260-acre Pacific Pointe at Douglas Park mixed-use development.
Dain Fedora, research manager at Jones Lang LaSalle Inc. in downtown Los Angeles, said the facility would be ideal for Mercedes to use for light manufacturing and assembling. Fedora and Jones Lang were not involved in the transaction.
The former Boeing site was one of just two in the region that could handle Mercedes’ requirement of more than 500,000 square feet within 15 miles of the ports. In all of the United States, there are only 23 facilities of that size within that distance of a port.
Mercedes already has facilities in Long Beach and Carson, and sources told the Business Journal those offices would be consolidated into the new facility. It is not clear whether the company plans to expand staffing levels. In either case, its commitment to the region was notable, as auto manufacturing in Los Angeles has been in decline. In 1999, 17,600 people were employed in the county’s automotive manufacturing sector. By 2011, the latest year of available data, there were just 5,899, according to figures from the state’s Employment Development Department.
Kimberly Ritter-Martinez, an economist at the Los Angeles Economic Development Corp., said Los Angeles is known now more for automotive design rather than manufacturing.
Nearly every major automotive manufacturer has a design center either in Los Angeles or Orange County.
Staff reporter Jacquelyn Ryan contributed to this story.
