Privately held PacTen Partners' new Commerce Pointe development will rise inside Newhall Land & Farming Co.'s master-planned Valencia Gateway business park in Valencia. The park stands next to Interstate 5—the state's busiest truck route—at the intersection of State Highway 126.

Construction of the first eight buildings will begin by the end of this month, with completion expected by the fourth quarter. The eight buildings will offer a combined 234,000 sf.

Six of the initial buildings will be sold, PacTen partner Dennis Fitzpatrick says, and the other two will be leased. Construction of the five-building, 306,000-sf second phase is expected to begin next January, he adds.

All of the buildings will range from 11,000 sf to 113,000 sf. They will feature 24-foot to 30-foot minimum warehouse clearance heights, ESFR-capable sprinkler systems in the larger buildings, and dock-high loading.

Industrial space in LA County is in short supply, brokers say, in part because there isn't much land available for new projects. Yet demand is extremely strong, thanks to the region's nearly decade-long economic expansion that has fueled the need for more manufacturing space as well as warehouses to store the goods that existing factories are producing.

According to the nonprofit Los Angeles Economic Development Corp., new construction has lagged growth in demand by more than 50% in recent years. That has sent the countywide industrial vacancy rate down to about 5% and rents soaring.

The market is even tighter in the Santa Clarita Valley, where PacTen's new project will rise. "The north portion of Los Angeles County is the tightest major industrial market in Southern California," Fitzpatrick says, noting that the fast-growing Santa Clarita Valley submarket has less than 1% of the Southland's nearly one billion sf of industrial inventory.

Craig Peters and Doug Sonderegger of CB Richard Ellis' San Fernando Valley office will market the new project for PacTen, Fitzpatrick says.