Sares Regis Group has sold two industrial buildings in the Conejo Spectrum Business Park Buildings for $69.5 million. The two headquarters-distribution buildings total 172,516 square feet. An unnamed private investment group purchased the properties. At $402 per square foot, the pricing was a record for the market.
Located at 1515 Rancho Conejo Blvd and 1489 Lawrence Dr., the two properties feature 17 dock-high doors, two ground-level doors, 30 feet of clear height, 1,000 amps, 277-480 volts, three-phase power, 201 parking stalls, 28 EV and bike parking stalls, and secured trucking. The property at Rancho Conejo totals 88,946 square feet, while the property on Lawrence Drive is 83,570 square feet. The Conejo Spectrum Business Park is located near several major freeways, universities and neighborhoods.
The two buildings were the last assets in SRG's 11-building, 505,378-square-foot Gateway project. The first nine buildings sold to a REIT in 2019. While two most recent sales were only recently completed, Sares was in negotiation with tenants to occupy 100% of the properties at the time of the sale. According to the developer, the lease rates will set new records.
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According to Steve Fedde, development partner of SRG Commercial Development, the sale illustrates that "demand for quality space among companies planning for growth still is running ahead of supply."
Industrial leasing demand has always been hot in the Greater Los Angeles area, but since the start of the pandemic, demand has accelerated. The US industrial market rounded out 2021 with dramatic leasing activity across the board in the fourth quarter, with asking rents growing at near-record levels and capital markets volume reaching record territory at $160.3 billion. A new report from Newmark signals that 2022 will be another blockbuster year for the sector, which has seen surging demand throughout the COVID-19 pandemic. US vacancy fell to 4.2%, a record low, with all 49 industrial markets Newmark tracks posting single-digit vacancy in the fourth quarter. Los Angeles and the Inland Empire were tightest, at 1.1% and 0.8% respectively.
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Kelsi Maree Borland
