Los Angeles-Area Distribution Center Goes for $68M
In a market where the vacancy rate for distribution centers is a tight 1.8 percent, a joint venture of Birtcher Development & Investments and Cornerstone Real Estate Advisers L.L.C. have purchased a 608,000-square-foot industrial building in Santa Fe Springs, Calif., for $68 million. The building was sold by Northwestern Mutual Life Insurance Co. The facility has been leased by Liz Claiborne as the retailer’s West Coast distribution hub since 2000. It is located at 9400 Santa Fe Springs Road.The original building was developed in 1980 and served as the headquarters for Fedco, a food and product wholesale company, and predecessor of Costco Ten years later, the building was redeveloped to nearly double its original size. Liz Claiborne leased the property in 2000 and has been there since. Brokers declined to release details on Liz Claiborne’s lease terms. “The location in Santa Fe Springs is centrally located in Los Angeles, where there is a vacancy rate of about 1.8 percent,” Clyde Stauff, senior vice president of Colliers International’s Orange County office, told CPN. “It is very difficult to find any building in excess of 200,000 square feet. So, it is rare to find a building of this size. A lot of companies would like that because as they grow, their only option is to go to the Inland Empire and trucking to get to Los Angeles and Orange County takes a lot of time.” The lack of available land will continue to plague the market and industrial construction continues to be minimal when compared to the total market base. Industrial projects are being bypassed in an effort to use the small amount of available land to best serve the growing population with mixed-use projects, according to Grubb & Ellis Co. Research’s “Industrial Market Trends for Los Angeles County” for the fourth quarter. Even though the industrial market is in high demand, planners currently appear to be overlooking the needs of industrial users. Though increasing gas prices combined with ideal access to one of the nation’s largest ports may be enough to keep port dependant industrial businesses vying for space in the metro area. Those businesses that are less reliant on the ports may move east in search of cheaper space which in turn will free up much needed product in the marketplace, the Grubb & Ellis report projected. Stauff represented the buyer. Birtcher Development & Investments and Cornerstone Real Estate Advisers, LLC, in the transaction.