East Los Angeles industrial developer Dedeaux Properties put shovels in the dirt in Vernon earlier this month as it began work on one of the first major construction projects to happen in the city in the last decade.
The $32 million ground-up project, just north of the L.A. River and south of the interchange where the 5, 10, 101 and 60 freeways meet, will consist of two state-of-the-art industrial buildings totaling about 232,000 square feet on nearly 11 acres. The project is expected to be completed and sold before the end of the year.
Brett Dedeaux, a principal of the family-run company, said a produce company is interested in the larger, 142,000-square-foot building, which is at 3305 Bandini Blvd. A garment company is in discussions to acquire the 90,000-square-foot building under construction at 3460 E. 26th St. He declined to disclose further details while the deals are in escrow.
Dedeaux Properties also expects to complete renovations by Feb. 1 on an 87,000-square-foot building at 2910 Ross St. in Vernon. The building, which the company bought in 2011, will be sold to and occupied by MG Produce Co., a wholesale produce company. Dedeaux declined to disclose the sale price other than to say project was valued at more than $15 million.
Dedeaux said he was able to find buyers for all three facilities with relative ease because what little stock is available in the tight L.A. industrial market is often outdated.
“There’s a lot of functionally obsolete space that doesn’t have the modern amenities most users want today, and as a result there’s a bigger demand right now for new products than there are new buildings,” he said. “It’s a good time to be developing properties again.”
Brandon Gill and Jae Yoo of CBRE Group Inc. represented MG Produce in its pending purchase, as well as Dedeaux Properties in its pending two-building sale.
Downtown Deal
Real estate investment company Markwood Enterprises Inc., like dozens of other investors and developers of late, is banking on the ongoing revitalization of downtown Los Angeles.
The small Century City firm, which since 2006 owned a 50 percent stake in a six-story parking garage at 912 S. Hill St., bought the remaining 50 percent interest in the property from its joint venture partner, Rock-Hill Holdings. The deal, valued at about $9 million, closed Jan. 3.
David Wright, director of operations for Markwood, said the firm was interested in owning the building outright because the property – just around the corner from the newly opened Ace Hotel – has a lot of long-term potential.
“The Ace Hotel was really kind of a game-changer in that area,” he said. “Now we’re going to take a little time to study it and explore our options.
Wright said Markwood may consider redeveloping the structure, which currently has about 12,000 square feet of ground floor retail space and nine levels of parking, both underground and above.
“We have some background in development, but nothing extensive,” he said. “A project that size would most likely need to be a joint venture for us with a developer-builder.”
Commerce Clinch
The Randolph Business Center, a Class A industrial distribution building on 16.5 acres in Commerce, sold last week for $53.8 million.
Newport Beach commercial real estate firm Western Realco and the investment arm of Bloomfield, Conn., insurance giant Cigna Corp. sold the 400,000-square-foot building at 5959 Randolph St. to the California Public Employees Retirement System. The building is fully leased to OnTrac, a regional parcel carrier formerly known as California Overnight, which serves the Western United States. OnTrac has four more years on its lease, according to CoStar Group Inc.
The property, built in 2009, was on the market for 89 days.
Jeff Chiate, Jeffrey Cole, Edward Hernandez, John McMillan and Jeff Sanita of Cushman & Wakefield Inc. represented both buyer and seller in the deal.
Staff reporter Bethany Firnhaber can be reached at [email protected] or (323) 549-5225, ext. 235.
