Logistics real estate continues to power through the downturn, buoyed by explosive growth in online retail. By some accounts, the forecast for industrial demand is better today than it was before the pandemic hit.
Prologis, the world’s largest owner of commercial warehouses, estimates that e-commerce customers require 1.2 million square feet of distribution space to support each $1 billion in sales. That figure helps explain why leasing activity rebounded quickly after a virus-induced pullback in March and April.
“We anticipate that accelerated e-commerce adoption and higher inventory levels have the potential to generate 400 million square feet or more of additional demand over the next two to three years,” commented Melinda McLaughlin, vice president of research at Prologis.
During the second quarter, U.S. e-commerce sales surged by 44.5 percent year-on-year as lockdowns and stay-at-home orders helped drive online purchases to more than $200 billion, according to the Department of Commerce. The blizzard of online sales is strengthening logistics hubs such as Kansas City, Kan., where fashion and lifestyle retailer Urban Outfitters announced in August it would build a $350 million omnichannel distribution center to support the company’s digital growth.
“Leasing volume has been strong, and the number of inquiries has been very strong,” said Rick John, executive vice president & branch manager at DAUM Commercial Real Estate Services. The industrial specialist in California’s Inland Empire added, “It’s been pretty healthy across the board, but the predominant force has been e-commerce.”
Construction activity remains robust, John added, but the COVID-19 situation has slowed the entitlement process, which will put more pressure on existing inventory. “Believe it or not, we have a shortage of million-square-foot buildings right now,” he said.
DAUM Commercial Real Estate Services has arranged a 42,000-square-foot, full-building lease at a Phoenix industrial facility. Executive Vice President David Wilson and Associate Carter Wilson represented the landlord and assisted the tenant, Empire Metal Products. The 10-year lease has a total value of $4.3 million.
Built in 1980, the facility is fully air conditioned and has 277/480-volt three-phase power with 3,600 amps, 18-foot clear heights and 12- by 16-foot grade-level overhead doors. According to Yardi Matrix, the asset last changed hands in 2017 for $4.2 million.
Located at 2362 W. Shangri-la Road, on 2.2 acres, the Class B property is just off Interstate 17. According to Carter Wilson, the asset is 2 miles from the tenant’s long-term headquarters, from which Empire Metal is planning to relocate and expand its manufacturing operations. The new location is 11 miles from downtown Phoenix.
At the end of July, another DAUM team negotiated a full-building industrial sublease outside Los Angeles. Robertson Properties Group owns the 254,700-square-foot property in La Mirada, Calif.
DAUM Commercial Real Estate Services completed the $14.35 million sale of two industrial warehouses totaling more than 85,000 square feet in the South Bay submarket of Rancho Dominguez. The buyer was Chicago-based First Industrial Realty Trust, while the seller was an unnamed cosmetic products manufacturer.
First Industrial plans to strategically redevelop the infill asset to fit robust distribution needs. The redeveloped site at 19400 and 19302 S. Laurel Park Rd. will consist of a 27,962 square-foot building with 15 docks situated on 3.98 acres of land. This redevelopment project is scheduled to be completed Q3 2021.
DAUM’s Natalie Lara advised the seller and procured the buyer, along with Jordan Lara and Andrew Lara.
Andrew Lara says, “Sourcing a buyer who could redevelop the asset to access its full potential and fulfill a huge demand in the market required several specific real estate fundamentals to come together. Ultimately, this was a true win-win scenario for both parties involved.”
Greenlaw Partners has acquired an industrial warehouse in north Los Angeles in a foreign trading zone. The asset traded hands before the coronavirus-inflected economic disruption and was highly sought after among investors. However, the property could be among the last to trade in the near-term as the pandemic has caused a market pause. The deal is an example of the demand for industrial properties prior to the outbreak.
“The lower tariffs that a foreign-trading zone location offers manufacturers was an added incentive that made the asset highly competitive amongst buyers,” Dennis Marciniak, VP of DAUM Commercial Real Estate Services, tells GlobeSt.com. “While the building ultimately sold to an investor with a distribution tenant in place, this in-demand location helped us to negotiate a strong price for our client.” Marciniak represented the seller in the deal along with VP Larry McEwan.
The 131,000-square-foot property is located on 8.7 acres and includes ample warehouse space, 15,000 square feet of office, a conference room, and an overflow storage area. The building features 28-foot clear height, four dock-high loading doors, and 100% refrigerated air. The asset received strong interest, no surprise since activity was healthy in the early part of the year. “Industrial activity throughout the first couple months of the year was very strong, as anticipated,” says Marciniak. “Naturally, the COVID-19 pandemic has caused a slowdown due to economic uncertainty.”
The outbreak will likely impact industrial investment activity, particularly in the first half of the year, depending on the severity. “At the moment, the industry is waiting to see how the situation plays out and many investors are taking a conservative approach for the time being,” says Marciniak. “If this crisis extends for longer than a month or two, we could see a ramp-up in activity later on in the year, as those who are looking to deploy capital into the market could see an opportunity where prices may decline and ultimately find bargains.”
As for now, Daum is recommending that clients pause before bringing assets to the market. “We’re advising our clients to hold off on marketing properties at the moment as we continue to monitor the situation,” adds Marciniak. “Investors with cash-flowing assets will likely want to hold on to their assets for at least another few months, before reevaluating.”
Sinclair Printing has sold an industrial warehouse in Palmdale for $15 million.
Greenlaw Partners acquired the 130,392-square-foot Antelope Valley property, located at 600 W. Technology Drive.
Greenlaw has secured a tenant for the building. A previous story by the Business Journal identified the tenant as Amazon.com, Inc., which plans to establish a Delivery Services Partners center at the facility.
Delivery Services Partners is a program which the e-commerce giant launched in 2018. It sees a logistics company partner lease Amazon-branded vans and hires its own drivers to deliver packages.
Situated on 8.7 acres, the 1998-built asset features ample warehouse space, 15,000 square feet of office space, a conference room and overflow storage space. The structure features 28-foot clear heights, four dock-high loading doors and refrigeration. It was previously occupied by SST Technologies.
Dennis Marciniak and Larry McEwan of Daum Commercial Real Estate Services brokered the property’s sale.
Voit Real Estate Services’ Mike Bouma and Paul Caputo identified and completed the $7.5 million acquisition of a 38,156 square-foot industrial building located at 12570 Industry St. in Garden Grove, CA, on behalf of the private buyer, The Smith Family Trust.
The seller, First GEM Properties, LLC, was represented by Chris Migliori and Paul Gingrich of DAUM Commercial Real Estate Services.
The Smith Family Trust will use a portion of this property for the expansion of its Garden Grove-based business, Teacher Created Resources, with the remaining portion of the building occupied in a multi-tenant format.
According to Teacher Created CEO Darin Smith, “Mike and Paul were able to identify an excellent investment opportunity for us in this tight market. The property will meet our current expansion needs, while providing an excellent source of rental income from the existing tenants, and potential future expansion as our business continues to grow.”
DAUM Commercial helps lease 101,663 SF class A industrial development in Orange County, CA to two nationally recognized credit tenants
ANAHEIM, CA and PLACENTIA, CA – DAUM Commercial Real Estate Services recently completed the leases of two industrial buildings totaling 101,663 square feet of industrial space in Orange County, California on behalf of the lessor, a joint venture formed by Panattoni Development Company, Inc. and a fund represented by Principal Real Estate Investors.
Moving equipment and storage rental company U-Haul International, Inc. will occupy a 53,850 square-foot warehouse, while industrial and housing materials manufacturer and distributor LG Hausys America, Inc., a division of the globally recognized LG brand, will occupy a 47,813 square-foot warehouse.
U-Haul has leased this 53,850-SF building at 1367 South Van Buren Street in Anaheim, CA
Both the free-standing buildings are part of Orange County Commerce Center, a Class A industrial development completed in 2019.
The new tenants join Rakuten Super Logistics and Beacon Roofing Supply at the four-building project, which totals 232,000 square feet and is located on 10 acres on the border of Anaheim and Placentia, California, according to DAUM’s Executive Vice President Chris Migliori.
LG Hausys America Inc., a division of the globally recognized LG brand, will occupy a 47,813 SF building at 711 South Van Buren Street in Placentia, CA
“Orange County has become one of the tightest industrial markets in the United States due to its prime location near Los Angeles, the Inland Empire, and major ports,” explains Migliori, who arranged the leases along with fellow DAUM Executive Vice President Paul Gingrich.
“The full lease-up of this project within months of completion speaks to the successful execution of the developer’s strategy. The modern amenities and superb quality of these facilities meet this high demand for well-located, well-appointed space suited for mid- and large-size industrial users.”
Migliori notes the caliber of the four nationally recognized credit tenants leasing space at the Orange County Commerce Center demonstrates the project’s strength as one of the best industrial developments the market has to offer.
According to Jacob LeBlanc, Partner at Panattoni: “The Orange County Commerce Center is positioned in an ideal location that not only provides convenient access to several major freeways and the ports of Los Angeles and Long Beach, but is in close proximity to many prominent companies and residential neighborhoods, optimizing the moving service and distribution operations of the new tenants.”
These two most recent leases are a culmination of several years of successful partnership with DAUM Commercial, notes LeBlanc. Migliori and Gingrich helped the developer acquire the land, a former strawberry farm, in 2017, and were the exclusive listing agents.
U-Haul signed a five=year lease of the building located at 1367 S. Van Buren Street in Anaheim and includes more than 8,150 square feet of two-story executive office space, 2.355 net acres of land, six dock-high loading doors with Z-Guards, one grade-level loading door, and 87 parking stalls.
LG Hausys signed a 7-year lease of the building located at 711 S. Van Buren Street in Placentia and includes 6,995 square feet of two-story executive office, 2.051 net acres of land, five dock-high loading doors, one grade-level loading door, and 69 parking stalls.
Each building features 30’ minimum warehouse clearance height, an 800-amp main switchgear with 2,000-amp UGPS, an ESFR sprinkler system, a fully secured and gated truck court/yard, 100% concrete truck court and auto parking areas, painted interior walls, white scrim foil, painted columns, and 3.0% skylights.
The development is situated in close proximity to five major freeways (Interstate 5, State Routes 91, 57, 55, and 241 Toll Road) and the Anaheim Canyon Metrolink System.
The project also boasts several corporate neighbors, including The Walt Disney Company, Time Warner Cable, Kaiser Permanente, and PacSun, among others.
Panattoni Development Company, Inc. and Principal Real Estate Investors have signed two tenants to long-term leases for more than 101,000 square feet in total in two buildings at the joint venture’s Orange County Commerce Center. The Commerce Center is a 232,000-square-foot, four building warehouse property straddling the borders of Placentia, CA and Anaheim, CA in the North Orange County submarket.
U-Haul International, Inc. will occupy a 53,850 square-foot warehouse at 1367 S. Van Buren St. in Anaheim, and LG Hausys America, Inc. will occupy a 47,813 square-foot warehouse 711 S. Van Buren St. in Placentia. Lease terms were for five and seven years, respectively. The new tenants join Rakuten Super Logistics and Beacon Roofing Supply as the center’s four sole tenants.
Daum Commercial’s Chris Migliori and Paul Gingrich represented the joint venture in the transactions. According to Migliori, “The full lease-up of this project within months of completion speaks to the successful execution of the developer’s strategy.”
An industrial center that touches two north county cities has signed two highly recognizable tenants in recent weeks.
U-Haul International and LG Hausys America, a division of the LG appliance brand, have leased a combined 101,663 square feet at Orange County Commerce Center, according to the brokerage DAUM Commercial Real Estate Services.
Monetary terms of their leases at the Class A industrial development were not disclosed. DAUM’s Chris Migliori and Paul Gingrich arranged the leases.
U-Haul International will occupy a 53,850 square-foot warehouse, while LG Hausys America will occupy a 47,813 square-foot warehouse.
Daum said U-Haul signed a five-year lease at 1367 S. Van Buren St. in Anaheim, which includes more than 8,150 square feet of two-story executive office space, 2.355 net acres of land, six dock-high loading doors with Z-Guards, one grade-level loading door and 87 parking stalls.
LG Hausys signed a seven-year lease at 711 S. Van Buren St. in Placentia including 6,995 square feet of two-story executive offices, 2.051 net acres of land, five dock-high loading doors, one grade-level loading door and 69 parking stalls.
The new tenants join Rakuten Super Logistics and Beacon Roofing Supply at the four-building project, which totals 232,000 square feet, Daum said.
The landlord is a joint venture formed by Panattoni Development Co. and a fund represented by Principal Real Estate Investors.
Executive Vice Presidents Chris Migliori and Paul Gingrich acted on behalf of the owners of a roughly 230,000-square-foot commerce center.
Panattoni Development Co. and Principal Real Estate Investors have inked two leases totaling 101,663 square feet with U-Haul International Inc. and LG Hausys America Inc., with each company occupying a free-standing building. The new tenants will join Rakuten Super Logistics and Beacon Roofing Supply at the partnership’s 232,000-square-foot Orange County Commerce Center in California, at the border between Anaheim and Placentia.
Executive Vice Presidents Chris Migliori and Paul Gingrich from DAUM Commercial Real Estate Services represented the owners in the deal. The brokerage company was appointed as the leasing agent of the property when the project broke ground in 2018.
U-Haul signed a five-year lease at the 53,850-square-foot building situated at 1367 S. Van Buren St. in Anaheim. The construction comprises more than 8,150 square feet of office space, 2.4 acres of land, six dock-high loading doors, a grade-level loading door and 87 parking stalls.
The 47,813-square-foot building located at 711 S. Van Buren St. in Placentia will house LG Hausys for the next seven years. The construction provides 6,995 square feet of office space, 2.1 acres of land, five dock-high loading doors, a grade-level loading door, as well as 69 parking stalls.
Yardi Matrix data shows that Orange County Commerce Center encompasses two additional buildings: a 69,882-square-foot one at 711 S. Van Buren St. occupied by a roofing distributor and a 60,809-square-foot facility at 1367 S. Van Buren St. Each structure features 30-foot minimum warehouse clearance height, an 800-amp main switchgear with 2,000-amp UGPS, an ESFR sprinkler system, a fully secured and gated truck courtyard, 100 percent concrete truck court and auto parking areas, as well as 3 percent skylights.
According to Gingrich, Orange County is one of the tightest industrial markets in the U.S. because of its proximity to metros such as Los Angeles and the Inland Empire as well as major ports.