The San Gabriel Valley’s industrial market clocked in another solid quarter as owner-users and other buyers opened their wallets.

The April-June period ended with 1.9 million square feet of sale and lease activity, according to Grubb & Ellis Co. That’s down slightly from the first quarter, but more than double a year ago.

“The buyers are coming back. There’s a perception that they can get a pretty good deal on a property now as compared to 2006, 2007,” said Tony Phu, senior vice president, Colliers International.

In one of the quarter’s largest deals, owner-user American Paper & Plastic bought a 296,960-square-foot building in City of Industry for $15.3 million, about $52 per square foot.

Build-to-suit projects are also picking up again, added Phu, in response to lower land prices and construction costs.

Vacancies fell from 4.1 percent to 3.8 percent, the first time the rate has dipped below 4 percent since 2008. Net absorption didn’t live up to the previous quarter, when more than 700,000 square feet was taken off the market, but users still took over an additional 300,000 feet of industrial space. That pushed the year-to-date total to more than 1 million square feet, a positive change from 2009, when the market had given back nearly 2.8 million square feet of industrial space over the first six months.

Industrial lease activity also remained steady as rents continued to become more affordable for businesses.

“Lease rates have come down to a point where tenants and landlords are actually making deals,” said Phu. “And I think rents are slowly stabilizing.”

Asking rents fell a penny from the first quarter to 42 cents per square foot, down 4 cents from a year ago and well off the 60 cents per square foot landlords were looking for in early 2008.

Industrial Market At a Glance

Inventory: 180 million square feet

Under Construction: 0

Asking Rents: 42 cents

MAIN EVENTS

• Food-packaging maker American Paper & Plastic bought a 296,960-square-foot City of Industry building that it plans to occupy. IStar Financial Inc. sold the property on nearly 17 acres at 500 S. Seventh Ave. for $15.3 million.
• Bechler Corp., a Long Beach-based real estate investor, sold an 111,638-square-foot distribution center in City of Industry at 14841 Don Julian Road for $9.9 million. The buyer, food wholesaler and distributor Sun Hing Foods Inc., plans to occupy the property once the current tenant’s lease expires. Soy sauce manufacturer Lee Kum Kee Inc. has two and a half years left on the lease.
• Car parts distributor Phoenix Aggregate Capital LLC bought an industrial building in City of Industry for $6.59 million from Newport Beach real estate investment firm Hager Pacific Properties. The buyer had previously leased a 100,000-square-foot building nearby from developer Majestic Realty and plans to move into its newly purchased 81,250-squre-foot facility by the end of July.
• Ground broke on a three-building complex that will eventually house the College of Business Administration at Cal Poly Pomona. The 80,000-square-foot complex will include faculty offices, classrooms and two auditoriums.
• A shuttered Black Angus Steakhouse in City of Industry has been demolished and construction has begun on a 100,000-square-foot BJ’s Restaurant Brewhouse, slated to open by the end of 2010. BJ’s, a publicly traded casual restaurant chain, currently operates nearly 100 restaurants in 13 states.