By Meghan Hall
The third quarter continued to be busy for Los Angeles’ industrial market. Transport-related companies, as well as e-commerce and a busier-than-ever port has continued to drive investor appetite for assets. In a deal that closed in the third quarter, Scout Capital Partners spent $117 million, or about $334 per square foot, to acquire a centrally-located property in City of Industry, Calif.
The asset is located at 17411 Valley Boulevard and totals 350,256 square feet, according to Newmark, who provided details regarding the deal in a recent market report. Public records indicate that the sale itself closed on September 1st, and that the seller was an entity affiliated with Valley Giraffe LLC. The limited liability company shares its address with Marina Del Rey-based Seidler Equity Partners.
The single-story structure was originally built in 1992 and is currently occupied by Sweda USA, a wholesale products supplier. The neighborhood is both industrial and residential; other businesses in the area include Union Pacific Railroad, Sealy Mattress Company, LTS California and the Grand Central Recycling or Transfer Station.
Records indicate that Seidler Equity Partners initially acquired the asset in September of 2017 for just $25 million, or about $71 per square foot. The latest deal, therefore, represents a huge return on investment for the seller.
The local industrial market continues to grow at an extremely rapid pace. In the Los Angeles submarket, vacancy sits at three percent and has remained low for 38 consecutive quarters, according to Newmark. Total inventory sits at about 1.051 billion square feet of space, and average asking rents in the submarket have risen steadily to $1.03 per square foot triple net. Because consumer spending is expected to remain high, and because global supply chain issues persist, demand for industrial real estate will continue to remain high.