TORRANCE, CA-L&B Realty of Dallas has closed on a $38.1 million deal for nine industrial buildings in Torrance, CA. The multi-building transaction, which represents $119 per square foot, is “the largest portfolio sale this year in the South Bay,” according to CBRE Group Inc., which represented the seller.  

Tenants in the portfolio include the Los Angeles Times, Simpson Performance Products, W.W. Grainger, Global Transportation Services and M.K. Diamond. The portfolio is 98% leased.

CBRE Group Inc.’s Darla Longo, Kevin Shannon, Barbara Emmons and Scott Schumacher represented the seller, an undisclosed institutional investor.

High construction costs for industrial buildings in Torrance, “coupled with a lack of available land, have created barriers to competitive developments in the South Bay and allowed the buyer to purchase this project at a price that is significantly below replacement cost, ” says CBRE’s Longo in a statement.

The ability to buy an entire portfolio in Torrance was a factor in the purchase, according to Paul Noland, L&B acquisitions director. Typically, the only buildings available in Torrance are small, individual buildings, he says. “For us to find a portfolio of industrial buildings in the South Bay was surprising, given their usual scarcity.”

The nine-building deal, he adds, was “large enough to justify the purchase, as opposed to the one-off, singleton buildings we usually see” in the market, he adds.

The South Bay industrial market is doubly attractive, Noland says, because tenants are not dependent on any single industry. “Some (industrial markets) live and die by port traffic,” he says, “whereas if you buy infill industrial in the South Bay, demand remains steady whether the port does well or not.”

He cited the dense population of the Torrance location. “People always need a warehouse or distribution building,” says Noland. About 500,000 people live within a five-mile radius of the South Bay city, while many business owners live in neighboring Redondo Beach and Manhattan Beach, according to the L&B executive.

The South Bay industrial market had a 3% vacancy rate in the third quarter of 2011, according to CBRE.