LOS ANGELES—Storm Properties has purchased a 5.5-acre land site in Gardena, CA, with plans to build an 115,000-square-foot class-A industrial facility. The land site was purchased in an off-market transaction, yet the owner received eight to nine unsolicited bids for the property, illustrating the tight demand for industrial product in this market. The industrial property is being built on a speculative basis and has not yet engaged a leasing team, however, Storm Properties has already received several inquiries for the space.

“The South Bay market is the Beverly Hills of industrial in the L.A. area. It is the place where everybody wants to be, so there is a lot of demand and it is supply constrained,” Alan Kwan, director of acquisitions at Storm Properties, tells GlobeSt.com. “For us to be able to take a very usable and flat 5.5-acre parcel is very desirable. We are very excited overall for the project.”

The 115,000-square-foot property will be top of the line with 32-foot clear height, 21 dock doors, two grade-level doors, a 135-foot truck court and ESFR sprinkler system. It will be able to accommodate a single user or two tenants, will span and entire city block, and offer users convenient access to the 110 and 91 freeways, as well as close proximity to the ports. “There is only 2% to 3% availability in this size range, but there is no availability for class-A product,” says Kwan. “We are building the most contemporary building with really nice offices and modern architecture.” The property is scheduled to break ground in the next two months and will come online in early 2016. It will cost approximately $12 million.

With a vacancy rate in the area consistently lower than 3%, Kwan explains that is was the tight market that attracted them to the purchase, but, as mentioned, they weren't alone. Although the property was never brought to market, the owner still received as many as nine competitive offers. Storm Properties was able to win the competitive bidding process with favorable terms and because it is a family-run office. Once the property is complete, they plan to hold it in the long term.

The company recently made headlines when it recruited Jon Spelke as director of development. Spelke will oversee the firm's entitlement and development projects for both its commercial and residential portfolios. He will be based in Storm Properties' Torrance, CA, headquarters.