LONG BEACH, CA-The largest infill industrial lease in L.A. County in more than 25 years has been signed by Mercedes-Benz USA. The long-term deal brokered by CBRE will see the car company take over a million square feet of space.
Mercedes-Benz USA will take over the former Boeing 717 aircraft manufacturing facility at 4501 E. Conant St. The site is immediately across from Long Beach Airport and is part of the 260-acre mixed-use development known as Pacific Pointe at Douglas Park. The development was acquired by landlord SARES-REGIS Group and an unidentified institutional partner in several phases, including the most recent acquisition of 160 acres, completed in October of last year.
The development includes plans for a future 26-acre retail project, a 50-acre office development, and roughly 750,000 square feet of high-end industrial development. CBRE EVP John Schumacher and SVP Brian DeRevererepresented the landlord in the Mercedes-Benz USA transaction. CBRE's Tres Reid and Jeff Babikian represented the tenant.
“This is the largest infill industrial lease in the Los Angeles area in more than 25 years," said Schumacher. "To be able to replicate this kind of opportunity would be virtually impossible. There simply is no way to aggregate a +/- 50-acre site within the infill area of Los Angeles, let alone in such close proximity to the port of Long Beach. It's unlikely that we'll see another opportunity for a contiguous parcel with these kinds of improvements within a 20-mile radius of the ports in the foreseeable future.”
DeRevere tells GlobeSt.com that there were several challenges in leasing the mammoth new home of Mercedes-Benz USA. “The plan after SARES-REGIS bought last fall was originally to rehabiliate the property and then lease it to users on a divided basis,” he says. “The backup plan, failing that, was to tear it down and build new buildings.”
A number of interested parties looked at the potential of using part of the property for various manufacturing uses, DeRevere says. “But really, Mercedes-Benz was the main target, based on their full use of the property.” The lease deal is “a huge win for Long Beach, and it's a great thing for the development to add a name of that quality. It speaks to what Southern California can offer a major corporation.”
DeRevere declined to estimate the potential jobs or ancillary businesses that could be lured by the Mercedes-Benz lease. “There's multiple functions that would go on here. It's a strong impact on the local economy and a welcome re-use of a historical building.”
As previously reported by GlobeSt.com, the Port of Long Beach is anticipating record revenue in its next fiscal year. The Port has been undergoing an ambitious expansion of facilities and infrastructure.
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