June 3, 2022 9:00 AM
Newmark[1]
announces that it has arranged the $39.8 million sale of a 5.37-acre industrial redevelopment opportunity located at 19401 S. Vermont Avenue in the infill South Bay submarket of Los Angeles, which continues to be one of the most supply-constrained industrial markets in the U.S.
Newmark Co-Head of U.S. Capital Markets Kevin Shannon, Senior Managing Director Scott Schumacher and Executive Managing Director Ken White represented the seller, Harbor Gateway LLC, along with industrial specialists Executive Managing Directors Bret Hardy, Jim Linn and Andrew Briner, Vice Chairman John McMillan
and Managing Director Danny Williams. The buyer was Atlas Capital.
“Given the industrial zoning and immediate access to the multiple major freeways, the offering represents an excellent opportunity to redevelop the existing, older office project into a Class A industrial product in the highly desirable Torrance submarket once short-term existing leases expire.” said Shannon.
Schumacher added, “With Los Angeles industrial rents for Class A product increasing over 60% these last four quarters, industrial land values have really exploded while opportunities for new development remain scarce.”
The property, which is zoned M3-1 with maximum buildable floor area ratio, is currently comprised of 12 office buildings, totaling 94,113 square feet. The location is coveted for its proximity to two of the busiest seaports in North America and LAX, the fourth ranked airport in the U.S. for cargo volume, as well as its immediate access to the 105,110, 710, 405 and 91 Freeways.
Office to industrial conversions continues to be an accelerating, yet niche, trend, according to Newmark Research. This trend quantified at least 49 projects converted nationwide since 2018 with 2.1 million square feet of office space converted in Los Angeles between 2018-2021. New construction in Los Angeles remains the primary vehicle to satisfy tenant demand in a market where vacancy is below 1.0%.
About Newmark
Newmark Group, Inc. (Nasdaq: NMRK), together with its subsidiaries (“Newmark”), is a world leader in commercial real estate, seamlessly powering every phase of the property life cycle. Newmark’s comprehensive suite of services and products is uniquely tailored to each client, from owners to occupiers, investors to founders, and startups to blue-chip companies. Combining the platform’s global reach with market intelligence in both established and emerging property markets, Newmark provides superior service to clients across the industry spectrum. Newmark generated revenues of nearly $3.1 billion for the twelve months ending March 31, 2022. Newmark’s company-owned offices, together with its business partners, operate from approximately 170 offices with 6,300 professionals around the world. To learn more, visit nmrk.com or follow @newmark.
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[1] Dba Newmark Knight Frank in California