Aerospace Acquisition: Boeing’s facility in Long Beach finds a buyer. Photo by Ringo Chiu.
With ecommerce and the promise of fast delivery, the need for industrial product has never been higher, especially in urban areas.
That’s a big reason vacancy rates for industrial spaces in L.A. County tightened further in the third quarter. The rate reached a mere 1.9% in the period, compared with 2.3% for the same quarter in 2018, according to data from Jones Lang LaSalle Inc.
Asking rent for the properties, meanwhile, continued to climb. The price rose 4 cents year over year to 89 cents per square foot on a triple-net basis.
“We are seeing huge tenant demand, which is driving huge capital demand for the best located industrial product whether that is land for development or existing product,” said Newmark Knight Frank Executive Managing Director Bret Hardy.
It’s no wonder that everyone from institutional investors and real estate investment trusts to developers have been snapping up properties in this prized asset class.
“Industrial has been the best performing asset class of all the different sectors,” said CBRE Group Inc.’s Kurt Strasmann. “Investors are allocating for industrial, and there’s a lot more demand than supply,”
Former Boeing site
One of the biggest buyers of pricey industrial space this year was Goodman Group. The company purchased Boeing Co.’s former C-17 manufacturing facility in Long Beach as a development opportunity for $230 million. It was the biggest industrial sale of the year, according to data from CoStar Group Inc.
Hardy was one of the brokers who represented Boeing in the sale.
Goodman Group also purchased a 37-acre site with eight buildings from Kroger Co. for $129.8 million. The property included a 16-acre distribution facility at 4841 W. San Fernando Road in northeast L.A. that fetched $59.9 million.
Many of the highest-priced industrial asset sales this year were in Vernon. Property Reserve Inc. purchased a roughly 305,000-square-foot industrial building in the city for $76 million while Lineage Logistics purchased a 121,000-square-foot industrial building for $71.6 million.
Another area with multiple high-volume sales was La Mirada. Clarion Partners acquired an industrial portfolio on Rosecrans Avenue for $76.8 million; a property trust purchased a 278,000-square-foot industrial building in the area for $65.9 million; and Robertson Properties Group bought a nearly 255,000-square-foot warehouse for $52.9 million.
Brentwood-based Rexford Industrial Realty Inc. has also been bullish on the market, investing more than $850 million in industrial properties in Southern California so far this year.
Infill product and construction
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