By BOB GOODMANSON
The West County industrial market continues to chug along and hold on to the momentum of previous quarters, despite the general market slowdown.
With the ports of Long Beach and Los Angeles receiving about 40% of the nation’s shipped goods, trade and warehousing continues to be strong in this market. Overton Moore Properties’ Pacific Gateway Business Center in Seal Beach, an 830,000-square-foot business park, recently saw six of its 10 buildings sold.
In the second quarter, three buildings sold for $39 million, despite a dearth of available financing. Of the four remaining buildings, there is strong activity with multiple offers.
The 45-acre site was surplus Boeing Co. land that took eight years to get approved due to California Coastal Commission constraints.
Hot Commodities
Owner-occupied properties for sale continue to be the hot segment of the market, fueled by low vacancy and strong demand.
Companies moving to Seal Beach are a mixed bag, including those focused on apparel, autos, household products, aerospace, drugs, construction, electronics and finance.
On the other hand, the slowing number of deals, especially in the leasing segment of the market, has caused lease rates to fall slightly.
Fortunately, the number of buildings coming on the market for sublease has not increased. The overall available supply of industrial buildings remains tight with long-term expectations of favorable growth.
Also, industrial buildings continue to be the investment choice of institutional and private investors. The recent sale-leaseback of a 58,867-square-foot aerospace building in Huntington Beach sold for $7.7 million and traded at a 6.25% capitalization rate for the 10-year leaseback.
The West County industrial market’s strategic location near the ports of Long Beach and Los Angeles, freeways and airports, as well as the growth in trade from Pacific Rim countries, has helped it weather the recession.
Supply and demand coupled with geographic strength will remain the determining factors in the remainder of 2009.
Goodmanson is a senior vice president in the Newport Beach office of CB Richard Ellis Group Inc.
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