A limited supply of quality industrial buildings for sale or lease within the San Gabriel Valley combined with an increasing demand for new industrial product led to Seventh Street's decision to move forward with the project's third phase, according to principal Craig Furniss.

“What happened was we got confident to move forward on spec,” Furniss tells GlobeSt.com. “Right before we started construction, (Kittrich) committed to the building.” Kittrich will fully occupy the building and own it.

Furniss says Seventh Street is seeing “renewed confidence in the market, and we're seeing again strong demand in the Valley for ownership. Interest rates stayed low, and people want to lock-in ownership. The last six months, there have been a considerable number of inquiries.”

The type of tenant looking for space is also changing, Furniss says, reflecting the region's demographic and economic trends, with a large number of Asian entrepreneurs and smaller businesses that have replaced the large defense plants.

“It's exciting,” says Furniss. “It fits the character of the San Gabriel Valley. There are a few manufacturers, food, some distribution companies. We're basically replacing the defense industry with these smaller businesses, which is most characteristic of the types of businesses driving the economy in Southern California.”

Seventh street estimates that the former government-owned site is also projected to create recurring annual revenues of $2.2 million per year to the city, county and Schools, and one-time revenues and private infrastructure investment of $9.1 million.

At the end of 2012, the San Gabriel Valley led the Greater Los Angeles industrial market, one of the strongest in the United States, in positive net absorption with 551,000 square feet, according to CBRE's "Greater Los Angeles Industrial MarketView." The report also notes that first quarter 2013 vacancies have dropped below 3% for the first time since 2008.

Mission 71's third phase will also include buildings of 42,000 square feet, 51,000 square feet and 114,000 square feet and will be located along 1,500 lineal feet of freeway frontage on the east side the 71 Freeway, just north of Mission Boulevard.

Each building will feature industrial design including up to 30-foot clear heights, private fenced yards, dock-high loading with ample maneuvering, ESFR sprinkler systems, excess parking, and build-to-suit, two-story offices. The buildings will be offered for sale or lease.

“No new construction in the past three years has created a significant lack of product in the 40,000+ square foot range, making the San Gabriel Valley industrial market one of the tightest markets in the entire LA region,” said a statement from Lynn Knox, first VP with CBRE and a member of the listing team for Mission 71. “In today's current low interest rate environment and with SBA financing easier to obtain, these types of building are in high demand.”

The fully occupied first phase of Mission 71 comprises 11 buildings ranging in size from 16,000 to 42,000 square feet on separate fee simple lots. Knox, Barbara Emmons, Dan de la Paz and Jason Chao of CBRE represented Seventh Street in the sale of the building. Jeff Huberman of Lee & Associates represented the buyer.

GlobeSt.com also reported on the groundbreaking for the second phase of Mission 71 Business Park.