Alere Property Group LLC in Newport Beach has snapped up one of the largest portfolios of industrial buildings on the market in the South Bay area of L.A. County.
The real estate investor and developer closed on the purchase of the Dominguez Hills Industrial Park and University Commerce Center, a nine-building portfolio of warehouse and distribution buildings located in Rancho Dominguez and Compton.
The single-tenant buildings total 432,361 square feet and are fully leased. Tenants at the properties include Iron Mountain Inc., Mars Foods and Sodexo Inc.
Terms of the sale weren’t disclosed.
Sales in the South Bay have averaged about $97 per square foot the past few quarters, according to the latest quarterly data from Colliers Inc. That price would put the Alere buy at around $42 million.
The industrial buildings range from 25,000 to 86,000 square feet on a little more than 20 acres. They were built in the 1980s.
The buildings were sold by a fund advised by Madison, N.J.-based Prudential Real Estate Investors, according to brokers with the Irvine office of Cushman & Wakefield Inc. who worked on the deal.
The sale is believed to be the largest sale of an existing industrial portfolio in the South Bay industrial market—totaling about 200 million square feet—in more than six months, according to brokerage data.
The area, described as one of the strongest industrial markets in the country, is poised for an uptick in rents, according to brokers who worked on the Alere sale.
Alere’s portfolio “offers a rare, institutional quality opportunity with a strong in-place cash flow as well as repositioning potential in a submarket poised for significant rental rate upside,” said Jeff Cole, executive director for Cushman & Wakefield, who worked on the transaction with colleagues Jeff Chiate, David Hasbrouck, Rooney Daschbach, Steve Bohannon and Ed Hernandez.
Vacancy Rates
Vacancy rates in the South Bay are running about 5%, with monthly rents averaging about 55 cents per square foot.
Those are about the same as vacancy and rental rates in Orange County’s industrial market, which runs about 250 million square feet in total.
Alere is the latest OC-based industrial developer investing in the South Bay.
Irvine-based Sares-Regis Group Inc. has been an active investor in the area around Long Beach Airport, snapping up land poised for millions of square feet of development.
Aliso Viejo-based CT Realty Investors also has bought in the South Bay area in recent months.
The South Bay purchase adds to a busy year of investments for Alere, which has also made a splash of late buying land for industrial development, primarily in the Inland Empire.
The company in June said it bought a nearly 31-acre site in Fontana that’s slated for a state-of-the-art industrial facility. In March it bought a nearly 34-acre site in Ontario that could hold an 800,000-square-foot property.
1.1 Million SF
Alere’s holdings in OC total about 1.1 million square feet, with buildings in Anaheim, Brea and Fullerton.
Earlier this year it singed eCMM Services, a subsidiary of Foxconn Technology Group, to an 184,000-square-foot lease for one of its Brea properties. eCMM leased the space for five years and will use the space as its primary distribution and processing center for Southern California, according to Alere.
