Industrial pricing in the Conejo Valley is heading to record levels. Rexford Industrial recently purchased a 49,585-square-foot value-add property for $133 per square foot, one of the highest per-square-foot prices in the market. It's no surprise values are heading up. The market, which sits north of Los Angeles and serves a strong manufacturing tenant base, has a sub 1% vacancy rate and growing demand. While the market is still a discount to the adjacent San Fernando Valley, there is momentum that could produce significant pricing increases this year.

“This was a 50,000 square foot building on a really large lot, so the coverage on it was only 28%,” Mike Tingus, president of Lee & Associates L.A. North/Ventura office, tells GlobeSt.com. “For the right buyer, it was a rare value-add opportunity, and there aren't many in this market. There are not many buildings for sale, and there is such a pent-up demand that if you can find a building like this and reposition it with the amenities that industrial users want, like dock-high loading, it is a good opportunity.”

While the Conejo Valley market is certainly seeing healthy activity, Tingus says that this property was a rare opportunity, which helped to capture the above-average pricing. The building had been used as a call center by AT&T and Verizon for 20 years, and was marketed by another brokerage firm as an office property. As a result, it sat on the market. “We repositioned the property and took out the office improvements, and we marketed it for an industrial use,” says Tingus. “The office vacancy rate is 15% and the industrial vacancy rate is less than 1%, so it made sense.”