Irvine-based developer Goodman Birtcher has bought a pair of massive distribution centers in Los Angeles County, including a property just over the county line in Santa Fe Springs, in one of the larger industrial acquisitions seen in Southern California in recent memory.
The North American subsidiary of Australia-based Goodman Group recently completed the purchase of two industrial sites owned by Albertsons Cos. Inc., in Santa Fe Springs and the San Gabriel Valley city of El Monte.
The two infill properties total about 133 acres and together hold a little more than 2 million square feet of distribution space.
Goodman Birtcher—one of the most active developers of large-scale industrial facilities in the U.S. in the past few years—plans to redevelop the two sites.
The El Monte site is slated for 1.2 million square feet of new space and specific redevelopment plans for the Santa Fe Springs site haven’t been disclosed.
Financial terms of the sale were not disclosed by Goodman Birtcher or Albertsons.
CoStar Group Inc. estimates that the two sites sold for a combined $240 million, or roughly $115 per square foot, a price also cited by other real estate sources familiar with the transaction.
A deal near that price hasn’t been reported in the region’s tight industrial market in the past four years, according to brokerage data.
Louis Tomaselli and Zach Niles, with the Irvine office of JLL, and Mark Detmer, with the Los Angeles office of the Chicago-based brokerage, advised on the transactions.
The Santa Fe Springs and El Monte distribution centers currently are used by Safeway Inc. and Vons, which operate under the Albertsons umbrella.
Albertsons, based in Boise, Idaho, is owned by an investor group led by New York’s Cerberus Capital Management, which bought the company in 2013 and later merged it with the Safeway chain.
The grocery chains aren’t expected to occupy the two L.A. County properties on a long-term basis.
Once a short-term lease for the sites expires, both “will provide significant redevelopment opportunities,” Goodman Birtcher said in a statement.
The sites represent “the largest industrial redevelopment and reuse opportunity in Southern California,” according to JLL’s marketing materials for the sites, which were listed for sale last September.
The Santa Fe Springs site, at 12801 Excelsior Drive, runs about 77.6 acres, while the El Monte site is about 56 acres.
Albertsons owns about 92 acres at the San Gabriel Valley location but opted to keep a portion of the property for the time being after initially marketing the entire site for sale.
The 1.2 million square foot logistics facility that is expected to be built there following approvals from the City of El Monte will cater “to a range of potential uses well suited for logistics and ecommerce customers,” Goodman Birtcher said.
The Santa Fe Springs site is expected to appeal to “food users, last mile logistics and ecommerce companies,” the company said.
The move to put the two properties up for sale—along with another 54-acre distribution facility in Oregon—came around the same time Albertsons disclosed plans to expand its 1-million-square-foot Irvine distribution facility by 200,000 square feet.
The plan for the Orange County facility is moving forward.
Goodman Birtcher already has one substantial development project in the works in Santa Fe Springs, which sits just over the Orange County border, adjacent to Buena Park.
The company is in the early stages of constructing a three-building development—also 1.2 million square feet—on another site it owns in Santa Fe Springs. That project—called Goodman Logistics Center, Santa Fe Springs—is being built on a former refinery site that was shuttered in the mid-1990s.
The first phase of the project is expected to open next year.
Santa Fe Springs’ industrial market runs a little more than 50 million square feet, and had an availability rate of less than 3% at the end of the first quarter, according to brokerage data.
Industrial buildings in the city average monthly rents of about 80 cents per square foot.
Other large projects Goodman Birtcher has undertaken in Southern California the past couple of years include sites in Ranch Cucamonga, Compton, Fontana and Eastvale, the latter of which last month landed Amazon as a tenant. It said it plans to lease 1 million square feet of logistics space at the Riverside County location.
The company said it has built 3.3 million square feet of industrial space in the Inland Empire and Los Angeles County over the past year, and has another 2.6 million square feet currently under construction in those two markets.
Birtcher Goodman’s overall development pipeline in the U.S. totals about $2.3 billion, which will result in 17.7 million square feet of space when built out, the company said last week.
It also has major projects in Pennsylvania and New Jersey.
The purchase of the two Albertsons facilities is the largest local infill development purchase reported to date by Birtcher Goodman, which began operations in 2012.
The company was formed when Irvine-based Birtcher Development & Investments, a longtime commercial real estate developer in the area, teamed up with Sydney-based Goodman Group to build large industrial facilities in key logistics hubs across the U.S. and other North American markets.
Goodman Group has long been of the world’s largest industrial property owners, with major holdings in Australia, New Zealand, Asia, Europe and the U.K., but hadn’t had a U.S. presence prior to its deal with Birtcher Development. N
