SANTA FE SPRINGS, CA—O'Neill Logistics has signed a 288,000-square-foot lease at a class-B industrial facility in Santa Fe Springs, CA, a tight Mid-Counties industrial market with 3.1% vacancy rate. The logistics firm signed a five-year lease with the landlord, Westcore Properties.

The previous tenant had vacated the property, and the landlord tapped JLL to release the site. “We had great activity for the space,” Luke McDaniel, SVP at JLL, tells GlobeSt.com. “The market has tightened up dramatically, and at the activity continued into January and February. It was really important to the landlord that we fill this vacancy.” McDaniel represented the landlord in the transaction along with JLL SVP Cameron Driscoll and VP Zac Sakowski. CRESA represented the tenant.

Located at 11811-11831 E. Florence Avenue, the property features 28-foot clear heights with 30 dock high positions and a large secured loading yard. It also has immediate access to the 5 and 605 freeway and the market offers close proximity to the ports. “This property was a great fit for O'Neill Logistics. They are a third-party logistics company, and the building is set up well for them,” says McDaniel. Before taking occupancy, the landlord will perform general refurbishment to the property, including new paint and clean up; however, no major renovations are required.

The industrial supply in Santa Fe Springs is becoming increasingly tight. “This is one of the last buildings over 200,000 square feet that is available,” says McDaniel. “Since the market downturn in 2008 to 2009, there has been little to no construction, and this year there will probably not be any new construction delivered in the Mid-Counties market. With the lack of available land, it is hard to build a large property.” McDaniel's adds that although space is limited, the demand for these property types is still strong—and that is good news for landlords. “We are going see landlords really beginning to push rents,” McDaniel adds.  “I would anticipate rents in 2015 increasing 7% to 10%.”

McDaniel couldn't release the rental rate for this specific property; however, he did say the rents for class-B properties, like this, run between $0.47 to $0.48 cents triple net. He expects those rents to hit the low $0.50 range triple net this year.