(To read more on the industrial market, click here.)
ANAHEIM, CA-New York-based ING Clarion, a real estate investment advisory firm, purchased the La Palma Distribution Center for $12 million. The 127,000-sf multi-tenant warehouse/distribution facility is located on La Palma Avenue, in North Orange County's industrial submarket.
The center, sold by New York-based McMorgan and Co., set on 5.67 acres, gives tenants easy access to the Los Angeles and Long Beach ports, as well as numerous local and international airports.
Though the office and housing markets continue to occupy much of the surrounding land, Steve Batchellor, participating broker and senior vice president of CB Richard Ellis, claims that warehouse and distribution facilities such as La Palma are still needed throughout the region.
"Most of the things [distributed in these facilities] go to the 17-plus million people living in Southern California," he says. "All things being equal, your best location for distributing products is to be right in the middle of a distribution area. Southern California is different than other industrial markets because we have no land. You have to distribute to your population base, so this is a very stable, safe, secure investment on irreplaceable land."
Batchellor also notes that class A properties are particularly in-demand because the lack of land not only means that such buildings cannot be reproduced, but also because low vacancy rates continue to push rates up.
"Los Angeles and Orange counties are full, their vacancy rates are so low and there's just no more land," he says. "The industrial base is actually shrinking at this point because multi-story residential apartments are taking off and the land is worth more to tear [the industrial properties] apart and lease as apartments."
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