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Monday, Jul 4, 2022

CenterPoint Buys Carson Industrial Asset for $143M

Oak Brook, Ill.-based CenterPoint Properties has purchased an industrial asset in Carson for $143 million, records show. The seller was Ducommun Inc., a Santa Ana-based manufacturing company with a large aerospace and defense presence.

CenterPoint announced the sale in December but Ducommun did disclose that $143M number in December the purchase price.

The 307,222-square-foot Carson property sits on 16.9 acres at 268 E. Gardena Blvd.

The property has a 30-foot clear warehouse, 19 loading doors, a fenced-in, concrete truck court and parking for 374 cars. More loading doors can be added to the site.

CenterPoint said the site’s proximity to the Port of Long Beach and several freeways made it desirable.

“The combination of a highly strategic location with this asset's scale and configuration makes this a very valuable addition to our infill portfolio,” Ashley Vanacore, CenterPoint’s investment officer, said in a statement. “This asset’s long-term optionality is highly aligned with our port-proximate infill strategy, particularly in a submarket like the South Bay.”

CBRE Goup Inc.’s Joe Cesta, Darla Longo and Barbara Perrier brokered the sale-leaseback transaction. In a sale-leaseback, the company that sells the property immediately leases it back. This arrangement allows the seller to continue to occupy their current property but receive a cash influx, allowing the company to grow or pay off existing debts.

A sale-leaseback allows the buyers to own a valuable piece of real estate with a tenant already in place who generally is responsible for the property. For value-add investors, this allows them to receive cash flow while finalizing plans on changes to make to the property when the tenant vacates. For non-value-add investors, a sale-leaseback means immediate cash flow without much work.

The asset was CenterPoint’s sixth purchase in the South Bay and 15th in Southern California in 2021.

CenterPoint  has now invested in excess of $750 million in 2021 just in the Southern California region alone, with transactions ranging from $5 million to $150 million,” Evan Lippow, CenterPoint’s senior vice president of investments, said in a statement. “Our commitment to the region remains steadfast, and we look forward to increasing our investment volume in the area in 2022.”

The company made a lot of purchases toward the end of the year. In December CenterPoint announced a deal to buy three industrial properties at 4061 Via Oro Ave. in Long Beach, 4250 E. Greystone Drive in Ontario and 1300 Palomares Ave. in La Verne. The properties have a combined 215,733 square feet spread across more than 16 acres.

Also in December the company acquired a 7.5-acre property at 19875-19899 Pacific Gateway Drive for $51.5 million.

And in October, CenterPoint acquired a distribution facility at 2835 Columbia St. in Torrance.

Rents in the South Bay have grown by double digits every year for the last five years, according to CenterPoint, making it a market the company is very interested in.

During the fourth quarter, the average asking rent for industrial space in the South Bay was $1.27 on a triple net basis, up 24 cents in a year, according to data from Jones Lang LaSalle Inc. Vacancy rates were low at a mere 0.7%, the brokerage found.

L.A. County’s industrial market as a whole has seen positive growth. During the fourth quarter asking rents were $1.12 on a triple net basis, up 15 cents in a year, and the vacancy rate was 1.3%, according to JLL data.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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