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.”