The property is located at 1609 E. 15th St. and is adjacent to the 10 Freeway and Long Beach Blvd. The one-story property provides easy access to the public, which is a plus for Kelly Paper's cash-and-carry business. Kelly Paper is a supplier of printing products for the wholesale printing industry as well as the general public.
Prior to relocating to the 15th St. location, Kelly Paper's Downtown store was on 16th St. The new site was attractive to the paper company because it provides them with immediate access to its core Los Angeles client base, as well as being a spacious facility that can be expanded to accommodate growth over time.
The lease is another sign of heath in the Central Los Angeles office market. For the first quarter 2002, Cushman Wakefield reports that of the 301 buildings located in this submarket there has been a vacancy rate of 15.4%. The total inventory for the submarket over the first quarter of the year is 58.3 million sf. Of that number, 8.9 million sf are vacant.
In the Central Los Angeles submarket for sublease space, there is 1.8 million sf vacant, which calculates to a 3.3% vacancy rate. When sublease vacancy is added to direct vacancy the amount of vacant space is 10.8 million sf, which figures to an 18.6% vacancy rate. A transaction of the size and price for the Kelly Paper Co. bodes well for a market with a net absorption rate in the first quarter of 2002 of 307,521 sf.
Rental rates for the submarket are estimated to fall between $1.74 and $1.76 per square foot. The Kelly Paper lease is approximately $7 per square feet. Considering the size of the Central Los Angeles market, which stretches from the Financial District to the City of Commerce, this lease price is fair market value for the area.
Jeff Thompson of Colliers Seeley's Commerce, Calif., office represented Western States Technologies in the transaction. The tenant, Kelly Paper Co. Inc., was represented by Peter B. Poulson of the Glendale, Calif., office of CB Richard Ellis.
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