Seventh Street Breaks Ground on 500 KSF Final Phase of Business Park in Pomona, Calif.
- Jul 23, 2014
Last chance. Seventh Street Development has broken ground on the fourth and final phase of Mission 71 Business Park, a 2 million-square-foot, 91-acre industrial campus in Pomona, Calif., within the high-demand San Gabriel Valley market of the Greater Los Angeles region. This concluding chapter of the premier redevelopment of the shuttered General Dynamics Military facility will yield Mission 71 West, which will feature 500,000 square feet.
These are good times in the San Gabriel Valley’s industrial market and Seventh Street is answering an increasingly loud cry for user accommodations.
“The economy has brightened and business owners realize their new challenge will be finding functional space that will allow them to expand,” Craig Furniss, principal with Seventh Street, told Commercial Property Executive.
The 23-acre Mission 71 West will consist of four industrial facilities carrying addresses on Mission Blvd. and offering building sizes as large as 201,100 square feet and as small as 67,000 square feet. The state-of-the-art structures will also encompass 6,000 square feet of high-quality office space.
Mission 71 West will have no shortage of suitors. The current occupancy level in the San Gabriel Valley is an enviable 1.5 percent and dropping, as per first quarter report by Colliers International, the commercial real estate services firm that is marketing Mission 71 West. According to Furniss, a large base of entrepreneurial companies, including a sizeable contingent of Asian firms, is in growth mode in the area. Many of these companies are in the high-tech sector and import/export-related businesses and are drawn to the close proximity of the San Gabriel Valley to the ports of Los Angeles and Long Beach, as well as the skilled and experienced employee base. And in Pomona in particular, the property taxes are lower than in the neighboring City of Industry. With so many favorable attributes, space is hard to come by in the area.
“There are virtually no new industrial buildings for sale in the San Gabriel Valley and the Western Inland Empire in the 75,000- to 200,000-square-foot size range and very few for lease, so it is as much about lack of supply as it is about an increase in demand,” Furniss said. “There are few remaining industrial sites available for development so new supply is limited and there is no relief in sight. Tenants and owners are now realizing this and trying to move quickly to tie up space.”
And at a progressive rate, the effort to “tie up space” in the San Gabriel Valley involves buying, as opposed to leasing. Furniss points out that financing if favorable for buyers through the SBA 504 loan program, allowing them to finance up to 90 percent of the purchase price on buildings as large as 200,000 square feet at very attractive 20-year fixed rates. “Rates continue to stay very low which makes owning over leasing a simple economic decision,” he added. “This is even before you factor in the appreciation in building values that is occurring now and is expected to continue into the future due to lack of supply.”
HBI Construction is on board the Mission 71 West project as general contractor and is on schedule to wrap up construction in the fourth quarter of 2015.
Ultimately, Seventh Street will have invested a total of $110 million and nine years in the development of Mission 71, including $40 million for Mission 71 West. However, the company is well on its way to turning a profit on the endeavor; all 15 of the finished buildings at Mission 71 have sold. The four buildings in the recently completed 463,000-square-foot third phase fetched an aggregate $48 million–before construction had reached completion. Additionally, the company is in escrow on one of the Mission 71 West buildings.
But Seventh Street has more than dollar signs in its eyes “To us, it is not only about making a profit but we want our legacy to be that we created a high-quality, sustainable work place for years to come,” Furniss added.