Development Along Alameda Corridor Slow in Coming
By DANNY KING
The $2.4 billion Alameda Corridor project, long heralded as a major turning point for the Southland’s economy, is heading toward a lukewarm debut in April.
The project is designed to speed cargo traffic in and out of the ports of Los Angeles and Long Beach. It also was expected to spur development along the 20-mile route. There has been some corridor-related action in recent months along the southern end, especially near Carson. But activity elsewhere has been slow, according to real estate sources.
The timing could hardly be worse for completion of the high-speed corridor that links local seaports with downtown-area warehouses: Cargo container volume through the Los Angeles and Long Beach ports has been essentially flat.
Meanwhile, expectations of increased demand for industrial properties near the corridor have failed to materialize.
“We’re in a down market,” said David Freytag, an industrial broker at Daum Commercial Real Estate Services. “Businesses are contracting. If times were better, (the corridor’s expected catalytic effect) may be true. But I don’t see things changing that severely because of the corridor being completed.”
Some brokers say that the corridor has been an impediment to attracting tenants to the area.
“We’re dealing with a construction zone,” said Frank Colonna, owner of Colonna and Co. real estate brokerage in Long Beach. “That’s always difficult when you’re showing space to prospective businesses.”
The biggest setback has been the recession, which has hit areas such as Vernon and Huntington Park hard. Closures of meatpacking plants and big layoffs at garment companies have shrunk the presence of industries that traditionally have been strong in communities along the northern part of the corridor.
Carson has seen most of the Alameda-related activity so far.
Hewson Co. of Sylmar bought 20 acres of corridor-adjacent property last December to construct two buildings with a combined 400,000 feet of industrial space.
The first building, with 250,000 square feet, was just recently completed. It was leased almost immediately after Hewson’s land purchase to Nova CFS Co. Hewson is in negotiations to sell the second structure, a 150,000-square-foot building slated for completion in March, to P & O; Cold Logistics, a perishable-food distributor, which already has entered into a ground-lease on the underlying dirt.
Nearby, at the Watson Corporate Center, Watson Land Co. is putting the finishing touches on a 177,000-square-foot spec industrial building, which it expects to have fully leased within six months.
“Overall, the economic fundamentals that underpin demand are still strong,” said Kirk Johnson, Watson Land’s vice president of real estate operations. “The container imports are still at an all-time high.”
Watson Land owns three industrial parks totaling 10.5 million square feet of space within a mile of the corridor, with almost all of that space being in Carson.
“Remember, this is a massive multi-year, multibillion-dollar project,” Johnson said. “It’s going take some time to assimilate into the (new) supply chain management patterns.” n
King is a staff writer with the Los Angeles Business Journal.
