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A 38,233-square-foot industrial distribution asset in Long Beach has sold for more than $11 million.

Metra Electronics, a 75-year-old electronics firm specializing in the manufacturing and distribution of automotive accessories, purchased the property, which is located at 3221 E. 59th St. in Long Beach.

Daum Commercial Real Estate Services, led by Michael Collins, vice chairman and director of Daum’s Capital Markets Group, and associate Dustin Hullinger, represented the buyer in the sale-leaseback transaction.

Metra was represented by Brian Held and Rob Flores of CBRE Group Inc. “Our company has a rich history of achieving successful outcomes for our clients, which is why they continually return to us when seeking commercial real estate representation,” Daum’s Collins said in a statement. “We were pleased to have another opportunity to serve this buyer in their search for an investment with strong potential in an extremely tight industrial market.”

With a 1.1% industrial vacancy rate at the end of the second quarter this year, the South Bay market is experiencing high demand from users in the area for quality distribution assets, according to Hullinger.

The Los Angeles market as a whole is showing solid signs of recovery since the pandemic, with apartment vacancies trending down to 3.4%, one of the lowest levels in years, according to Daum data, and Greater Los Angeles achieving six-figure positive net absorption in the second quarter despite numerous headwinds in the form of inflation, interest rate bumps and foreign conflict. These positive indicators bode well for the region’s industrial sector, Hullinger said.

Constructed in 1970, the industrial property is situated in a prime location adjacent to well-established transportation infrastructure including major freeways, railroads and ports, with easy access and egress.

Metra Electronics sold a 38K SF distribution facility in Long Beach to an undisclosed high net worth investor for more than $11M.

The short-term sale-leaseback deal means Metra will stay in the warehouse until the lease expires next year. DAUM Commercial Real Estate Services Capital Markets Group Director Michael Collins and associate Dustin Hullinger represented the buyer. The deal was “the latest in a series of real estate deals the company has directed for this high-net-worth private investor,” DAUM said in a release.

CBRE’s Brian Held and Rob Flores represented Metra. The property at 3221 East 59th St. in Long Beach sits on about 2 acres and was built in 1970.

DAUM Commercial Real Estate Services has arranged the sale of an industrial distribution property located at 3221 E. 59th St. in Long Beach. Metra Electronics sold the asset to a high-net-worth private investor for more than $11 million.

Michael Collins and Dustin Hullinger of DAUM’s Capital Markets Group represented the buyer, while Brian Held and Rob Flores of CBRE represented the seller in the deal.

Constructed in 1970 on nearly two acres, the 38,233-square-foot building features 22-foot warehouse ceiling heights, three dock-high truck positions and grade-level loading. Additionally, the property is fully fenced and secure and provides ample truck parking and storage area.

JLL’s Northeast Industrial Region has arranged the acquisition of a 85-acre development site and secured a tenant to lease the 1.2 million square feet distribution facility that will be constructed at 3379 Pocono Summit Rd., Mt Pocono, PA. JLL completed both transactions on behalf of Newland Capital Group, a national industrial investor, developer, and asset manager.

Located off of I-380 and I-80 on the eastern edge of the Northeast Pennsylvania Industrial Market, the site will be redeveloped as a 1.2 million square feet warehouse and distribution facility pre-leased to a major industrial tenant. The state-of-the art facility will feature 191 truck docks, four drive-in doors, 359 trailer stalls and parking for 426 vehicles.

The buyer was represented by JLL’s Northeast Industrial team, led by executive managing director Jeff Lockard, vice president Ryan Barros, and associate Kevin Lammers, who worked with Casey Mungo of DAUM Commercial to arrange the sale and negotiate the lease. JLL managing director Steve Cooper represented the seller.

“This is an ideal site offering access to the nation’s most densely populated region, with over 24 million people living in the NY–NJ–CT–PA Combined Statistical Area,” said Lockard. “Newland Capital Group will bring an exceptional new development to one of the most sought-after industrial submarkets in the country and we are delighted to be a part of this exciting new venture.”

Northeast Pennsylvania continues to be viewed as a core industrial market for occupiers and investors alike. In the past few years, companies including medical supplies distributor Medline Industries, General Mills, Lowe’s and NFI Logistics have built or leased millions of square feet of space, driving Northeast Pennsylvania’s industrial vacancy to record low levels.

According to JLL’s 2Q 2022 report covering the Eastern & Central Pennsylvania Industrial Market, Class A vacancy fell to a record low of 1.7 percent during the past year as asking rents climbed over 24 percent year-over-year to $7.93 psf. Despite elevated construction levels, more than one third of the 42.6 million square feet of new product currently under construction has been pre-leased.

“We are delighted to bring our expertise in the industrial market to a job-creating project that will contribute to the Poconos economy while providing vital logistics space at the heart of one of the world’s most densely populated markets,” said Ty Newland, managing principal, Newland Capital Group.

Construction of the new distribution center is expected to get underway October 1, 2022, with competition scheduled for 1Q 2024.

Done carefully, “it can compete with low-cost countries such as China.”

As the advantages continue to erode for U.S. manufacturers operating in low-cost countries, interest in reshoring and near-shoring continues to climb. This is especially true in the age of COVID-19, with the pandemic’s near-crippling impacts on supply chains, including for logistics and distribution, according to a recent report from Yardi’s CommercialEdge.

“Moving back to the U.S. or near-shore destinations such as Mexico, Canada, or Costa Rica have distinct advantages—most notably shorter and easier-to-manage supply chains, improved communication, and reduced probability for disruption,” Yardi’s Doug Ressler tells GlobeSt.com.
“When done carefully, reshoring or nearshoring can deliver enough improved efficiencies (and hence lower operational costs) to compete with low-cost countries such as China.”

However, establishing a new supply chain—even in the U.S.—can be expensive and challenging, Ressler said.
“To be competitive and add value to their supply chain, logistics providers must contribute their own improved efficiencies and cost reductions to make the supply chain as agile and competitive as possible.

“Companies are pouring billions of dollars into new facilities and supplier agreements as they strain to secure needed raw materials,” he said.

Space Might Be ‘Hard to Come By’

The CommercialEdge report said that manufacturers that re-shore production will face a unique set of challenges.

“Not only will they need industrial space to manufacture goods, but logistics and distribution facilities as well,” Ressler said. “With a national vacancy rate of just 4.1%, space might be hard to come by.

“A tight labor market means that site selection will not only be dependent on infrastructure but also on labor pools.

“American labor costs are also much higher than places where firms have offshored manufacturing, meaning firms will explore automation solutions and likely increase costs for their products.

“Production and supply chains are complex systems that take years to reshape—reshoring is not a quick fix for firms struggling in the current global economy. We expect that reshoring will continue during this decade, albeit at a slow pace, and be a driver of demand for industrial real estate for years to come.”

A ‘Flight to Quality’ Emerges

Avery Dorr, vice president at Stonemont Financial Group in Atlanta, tells GlobeSt.com, “We are beginning to see a significant demand spike for warehouse space by domestic manufacturers from coast to coast.

“As populations increase in major cities across the country, the need for move-in ready warehouse space will only continue to grow. Manufacturers will seek out lower-cost markets with good labor fundamentals, convenient access to major transportation networks and local economic incentives.

“This flight to quality among manufacturers will mean that competitiveness for available land will only continue to escalate further, and developers will be forced to put more thought behind choosing locations that are attractive to these types of tenants.”

Seeking Multi-Purpose Facilities

According to the Reshoring Initiative, over 1,800 companies have re-shored production in 2021.

Chad Jacobson, COO, DAUM Commercial, tells GlobeSt.com that “this staggering number of re-shoring moves has contributed to the tight compression of industrial vacancy rates we have seen across the country in 2022.”

Jacobson pointed to high-demand regions such as California’s Inland Empire dominating the sector at 0.8% vacancy in July 2022, followed by Columbus, Ohio, at 0.9%, and Los Angeles at 1.9%.

“To decrease costs and increase productivity, re-shoring manufacturers are seeking multi-purpose facilities in locations poised for long-term growth and expansion,” he said. “Competition for logistic facilities, warehouses, and distribution sites is steadily increasing as these manufacturers demand production space in close proximity to warehouses for storage and post-production distribution.

“Site selection factors are playing a strong role in which regions are being impacted most by the overwhelming industrial demand. The need for skilled labor, established transportation infrastructure, and availability of land for development is driving demand in regions such as California, Arizona, and Oregon—resulting in recent developments and expansions including the Taiwan Semiconductor Companies’ new manufacturing development in Phoenix expansion of well-established companies like Intel in the Silicon Forest region of Portland and rapid industrial expansion projects in the Otay Mesa submarket of San Diego.”

Despite the current pressure applied by increasing industrial demand, Jacobson said that growth is expected to move at a moderate pace.

“With unresolved disruptions and supply chain issues, new deliveries are coming online at a slower pace than demand requires. As a result, re-shoring operations are slowed, but consistent demand for industrial real estate will be stabilized over the next decade.”

Skilled Workers are Aging Out

Peter K. Billmeyer, SIOR, Co-Founder, Managing Principal of Bespoke Commercial Real Estate, tells GlobeSt.com that the challenges for U.S. manufacturers go far beyond just a CRE issue.

“When manufacturers started offshoring decades ago, the result was a sharp decline in vocational schools and students pursuing careers in the trades,” Billmeyer said.

“Instead, an irrational and misguided focus on everyone going to college permeated our society. This decades-old mistake is why we have massive labor shortages in skilled labor positions like construction and manufacturing.

“And now our skilled workers are aging out and a younger workforce is saddled with staggering student debt.”

Billmeyer said that “everyone loves the idea” of domestic manufacturing, but it was extremely challenging prior to the current industrial market conditions and now it’s even more daunting with labor and production costs and supply chain challenges where they are.

“Finding (and training) the next wave of skilled workers to run the complex machinery and create those beloved products is going to be expensive and will take time and money.”

Sustainability and Energy a Focus

Robert Hess, vice chairman of Global Corporate Services at Newmark, tells GlobeSt.com that labor and energy are perhaps the two most pressing and rapidly-rising global considerations for both manufacturers that are reshoring production and operators pursuing site selection for larger, more complex industrial projects.

“Many, if not all, of these reshored and foreign direct investment (FDI) opportunities coming into North America will result from companies looking for green energy and renewable platforms,” Hess said.

“These firms will likely be coming from countries where a focus on sustainability and energy efficiency is mission-driven and engrained in their sustainable development goals, which means they’ll expect access to power grids that can provide reliable, redundant and affordable electricity.”

US Manufacturing and Supply Chain a Problem

Andrew Zola and Juan Arias with CoStar Advisory Services tell GlobeSt.com that the higher US dollar will continue to reduce the competitiveness of US-based manufacturing.

They see continued supply chain disruptions cause a lack of availability of components for manufacturers and the US port/rail/highway infrastructure has exhibited its limits in the last few years.

“The US not only lacks a manufacturing workforce but also a supply chain one (truckers, warehouse workers); firms looking to reshore will need continued government incentives

“The infrastructure bill is good progress, but investing more specifically in industrial infrastructure (factories, machines, robots) would make a larger impact on U.S. cost competitiveness and on reshoring. In the long-run, subsidized industries will fail if manufacturing costs aren’t competitive.”

Near-shoring or friend-shoring remains a good option for manufacturers, attracting work that would otherwise come back to the US, Zola said.

“Although on-shoring is less competitive compared to alternatives (China/ASEAN Countries/Mexico), it does provide a hedge against supply chain disruptions,” Arias said. “Certain markets are better targets for onshoring because of lower operating costs (lower wages, energy costs, and state and local taxes).

“Many southeastern, Midwestern, and Texas markets have lower operating costs, making them attractive locations.”

A 55,880-square-foot, Class A industrial asset in the City of Industry has sold for an undisclosed price.

The property is located at 1020 Wallace Way. The freestanding building is situated on a 2.57-acre site and features 30-foot clear height, five dock-high loading positions, one ground-level door, and 91 parking spaces. It also has 800 amps of power, LED security lighting and related technology.

Daum Commercial Real Estate Services’ Executive Vice President Nathan Lara represented the buyer, Gigabyte Technology, in the sale. The company is a Taiwan-based computer hardware manufacturer. Lara said it was a rare purchase by a user on speculative development in the market.

“This acquisition was part of a strategic expansion for our client, a Taiwan-based global manufacturer and distributor of computer hardware,” Lara said in a statement. “Leveraging our experience and connections within this supply-constrained market, we were able to identify a prime location with plans for a class A building development and get our client comfortable with making an offer based on these plans.”

Lara noted that the in-demand Lower San Gabriel Valley submarket saw below 1% industrial vacancies in the second quarter.

“This property met critical location requirements for the buyer, providing frontage on a major street and convenient access to the 60 Freeway,” Lara said. “The building’s strategic location and class A amenities are positioned to provide great value for the owner-user and their growing business needs.”

Lara added that as investment dollars pour into the competitive industrial market in hubs throughout Southern California, it can be difficult for owner-users to secure Class A space.

“In the past year, there were only a handful of user sales on spec development…users seeking building ownership can still acquire within these regions, but must be willing to be creative, proactive, and move quickly,” he said.

Daum Commercial Real Estate Services has completed the lease of a new 68,650-square-foot industrial distribution building in Oxnard.

The total consideration of the five-year lease is about $3 9 million, according to Daum.

The site, located at 500 North Eleva, St., spans 3.4 acres within the Mcinnes Ranch Business Park. Just off of Rice Avenue. The building has 30-foot minimum clearance height, eight dock-high loading doors, two grade-level loading doors, high pile material storage and a secure truck court.

Mitchell Conlee, an executive vice president at Daum, represented E&E Trust, a private investor and developer that owns the building, and secured Robert Mann Packaging as the lessee before the building’s completion. Bart Reinhard of JLL represented the tenant in the lease transaction. “With this lease, the tenant is able to occupy a rare available new asset in the market and expand from its current Oxnard location, while the owner was able to achieve rents above asking rates; Conlee said in a news release announcing the deal.

The Oxnard/Port Hueneme submarket ,s experiencing tight direct industrial vacancy rates of 0.64%, according to a recent report published by Daum.

Daum previously represented E&E Trust in the acquisition of the development site and has completed several additional industrial transactions in Mcinnes Ranch Business Park and the surrounding areas.

United Legwear & Apparel Co. will occupy the build-to-suit distribution center in California’s Inland Empire.

McDonald Property Group, of Laguna Beach, Calif., will soon start construction on a 1.8 million-square-foot build-to-suit distribution center in Beaumont, Calif., in Southern California’s Inland Empire.

The BTS is for United Legwear & Apparel Co. LLC, a major manufacturer of legwear, bodywear and other apparel and accessories, including licensed brands such as Hurley, Champion, Fortnite, Van Heusen, Skechers and Puma.

ULAC’s landlord under a long-term lease will be USAA Real Estate, which intends to own this investment long term, a spokesperson told Commercial Property Executive.

The property is intended primarily for assembly and distribution uses, with ancillary management offices, and will feature a 40-foot clear ceiling height, about 30,000 square feet of office space, and assembly, racking and automated material handling systems.

Construction will begin later this month, with completion expected in December 2023.

The site encompasses 85 acres known as Phase II of the Crossroads Logistics Center, a master-planned project at I-10 and Hwy. 60.

In a prepared statement, Chris Volpe, ULAC’s chief operating and financial officer, said the facility will let ULAC consolidate their West Coast logistical hub and distribution point in one location. ULAC currently operates facilities in Whittier and Rialto, Calif.

The USAA Real Estate–McDonald team completed Wolverine Worldwide’s fulfillment center and another build-to-suit fulfillment facility as Phase I of Crossroads Logistics Center in 2017 and 2020, respectively.

David Consani, Jim Koenig, Darla Longo and Barbara Emmons of CBRE and Rick John of Daum represented McDonald and USAA in the lease transaction. Luke McDaniel, Cameron Driscoll, Jeff Bellitti and Mac Hewett of JLL represented United Legwear.

The architect of record is HPA Architecture, and the general contractor is Fullmer Construction Co.

High and low
In January, USAA received $81.6 million in construction financing from Regions Bank for the development of an 816,000-square-foot distribution center in Beaumont as a BTS for Amazon. McDonald Property Group is USAA’s development partner on that project also.

Rexford Industrial Realty Inc. bought a five-acre land parcel in the Los Angeles County submarket of Santa Fe Springs for $34 million, with plans for a ground-up development of a 108,000-square-foot, Class A warehouse facility at the site.

The Lara Team of Daum Commercial Real Estate Services has completed the sale. Daum Executive Vice Presidents and Lara Team members Jordan Lara, Nathan Lara, Rudy Lara and Andrew Lara represented the seller and procured the buyer.

“The seller, a private family business, had an irreplaceable location in the Mid-Counties area of Los Angeles County ideally suited for e-commerce distribution,” Jordan Lara said. “With its dose proximity to highway transportation routes, direct access to the Ports of Los Angeles and Long Beach, and freeway visibility with over 500 feet of Interstate 5 frontage, we were ultimately able to secure one of Southern California’s leading industrial real estate firms as the buyer and complete a win-win transaction for both parties!”

The property is located at 13711 Freeway Dr. in Santa Fe Springs. The existing 87,500-square-foot property is also being offered for lease with flexible terms while the development planning is underway.

This is the latest in a string of property purchases by Rexford. The company recently acquired six industrial properties across Southern California for an aggregate purchase price of $218 million, adding to its growing industrial portfolio.

The Santa Fe Springs submarket posted industrial vacancies of o.8% in Q1, pushing developers such as Rexford to strategically pinpoint and acquire available properties.

Nathan Lara, who represented the family in acquiring the property from their landlord in 2016 alongside Rudy Lara, said the parties navigated market challenges to ensure that Rexford Industrial would be able to deliver a state-of-the-art development to the market.

“Our long-standing relationships with both the buyer and the seller were crucial in the negotiations for this transaction,” Nathan Lara said. “Throughout the entire transaction process, we kept all parties in regular communication to successfully work through due diligence and satisfy zoning requirements. When zoning challenges emerged, we were able to effectively communicate both the seller’s and buyer’s interests to maintain the chemistry among all groups.”

The property offers immediate access to major freeways such as 1-5, l-605, l-105 and SR-91. Its location also places it within 25 miles of the Port of Long Beach, the Port of Los Angeles and Los Angeles International Airport.

Executive Vice President of Investments at Rexford Industrial Patrick Schlehuber said Rexford worked with the city to maintain zoning for the warehouse parcel.

“The city was in process of downzoning the subject property and adjacent neighbors,” he said. “Our team worked effectively and collaboratively to maintain the current zoning for both industrial and commercial uses, which will allow us to execute our long-term plan to deliver much-needed new Class A space to the market.”

A two-building complex on 4.4 acres in Buena Park has been leased to an unidentified automobile wholesaler, according to DAUM Commercial.

Terms of the lease were not disclosed.

The campus at 7015 Knott Ave. includes corporate offices, a showroom and warehouse space in 14,019 square feet, DAUM reps said.

Chris Migliori at DAUM Commercial represented the owner, Cal Hickel Holdings LP, securing a six-year lease for a single tenant.

“Our client had a prime, central Southern California location available that presented the potential to be utilized or adapted for a wide variety of uses, including warehousing and distribution, vehicle sales, or a parking lot,” Migliori said in a statement. “… We ultimately identified an automobile wholesaler and storage business that saw strong value in the asset’s existing facilities and 20:1 parking ratio.”

The north Orange County submarket has “tight vacancies of 1.24% in Q1,” according to a new DAUM report.