The Los Angeles County industrial market saw its highest annual negative net absorption on record in 2023 resulting in vacancy levels at their highest point in a decade. One property that now may test the market in the new year is the 71,510 square foot industrial asset offered for sale for $25 million or approximately $350 per square foot. The property is located on just over 2.6 acres of land at 5500 S Soto St. in the town of Vernon.
The marketing of the industrial asset is handled by Voit Real Estate Services’ Associate Jordan Haynes and Vice President Selden McKnight. The property is currently owned by an entity affiliated with 5500 S Soto LLC, which acquired the asset in 2021 for $15.58 million, or about $217 per square foot, according to public records.
The two-story Class A industrial building was originally constructed in 2001. The marketing materials state that the property can be divided into two units and contains approximately 8,730 square feet of office space. Some of the other features include 10 dock high loading doors, two ground level doors, 24’ warehouse clear height and a sprinkler system. The property also has a fenced parking lot and external yard area.
The property is centrally located just south of downtown Los Angeles and has access to US Interstate Highways 5, 10, 105, 110 and 710. These access points also link it further to Los Angeles International Airport as well as the Port of Long Beach.
The Registry recently reported on the sale of an industrial property of a similar size slightly further east in the City of Industry. West Harbor Capital, a real estate investment firm specializing in infill industrial properties, announced it has completed the acquisition of a multi-tenant distribution facility spanning 69,498 square feet at 14313-14351 E Bonelli Street for a total of $16.5 million.
Considering the health of the overall Los Angeles county industrial market, JLL recently noted in their Industrial Insight report for Q4 2023 that despite the recent challenges, the market recorded a 46 percent year-over-year rise in the number of large block leasing deals, primarily driven by logistics and distribution users. South Bay dominated the market in 2023, hosting more than one third of the large block leasing activity, attributed to its strategic proximity to ports and lower drayage costs.
Looking ahead, JLL believes that the expectation of ongoing rate cuts throughout 2024 is likely to sustain sales activity in this submarket. Optimism prevails among investors in the Los Angeles industrial sector, as total vacancy remains below the national average, and a limited construction pipeline mitigates the risk of oversupply. With demand steadily rebounding and rates stabilizing, JLL states that there are encouraging indications that the market is poised for improvement in 2024.
