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Thursday, Mar 28, 2024
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Mid-Counties Industrial Shows Signs of Rebound

The Mid-Counties industrial market at the border of Los Angeles and Orange counties saw positive trends in the fourth quarter, making it one of the strongest industrial submarkets in Southern California and the nation.

Gross activity came in at roughly 1.6 million square feet, a 34.5% increase from a year earlier. Transactions in the 10,000-to-99,999-square-foot range led the activity, accounting for more than the half the total.

Market

The market includes Buena Park, Cypress, La Palma and Los Alamitos in Orange County, and Santa Fe Springs, Cerritos, La Mirada, Paramount, Downey, Whittier, Norwalk, Lakewood, Bellflower and Artesia in L.A. County.

The number of transactions in the quarter increased 19% from a year earlier, or 44 versus 37. Most came in at less than 50,000 square feet.

Activity among larger tenants was strong and came late: Four of the five deals of more than 100,000 square feet took place in the last two weeks of the quarter.

Those included Marathon Distribution Services Inc.’s 147,000-square-foot expansion with its move to La Mirada; Paramount Can Co.’s expansion to 140,000 square feet in La Mirada; and ADI Logistics’ sublease of 105,000 square feet from Living Spaces, also in La Mirada.

A shrinking supply and premium prices for class A have brought a return of speculative development on an infill basis throughout Southern California.

More than 1.8 million square feet of such new development are in various stages of construction in the county-border market.

Sares-Regis Group recently finished a 305,000-square-foot distribution facility that it agreed to sell to Industrial Income Trust before construction.

Golden Springs Development Co. demolished two old Smurfit-Stone buildings and is grading for a 449,000-square-foot distribution center.

Prologis, Western Realco

And Western Realco is set to break ground on two buildings totaling 93,856 square feet and has presold a 50,669-square-foot building. All four projects are in Santa Fe Springs.

Prologis Inc. recently acquired 33 acres in Cypress, with plans for three buildings collectively totaling 664,000 square feet. More projects are planned.

The outlook for this year suggests appreciation in lease rates and sale values as occupiers, developers and investors in the submarket pursue opportunities with a greater sense of urgency due to continued declining vacancies and availability rates and strong transaction volume.

Rick McGeagh is a senior vice president in the El Segundo office of CBRE Inc.


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