CARSON, CA—Industrial land in the South Bay could be more valuable as-is due to the limited supply of outdoor storage space in the area. In an earlier story, GlobeSt.com reported that Prologis purchased a 10-acre land site from Hunter Woodworks for $14.2 million. In this update to that story, Lee & Associates’ Long Beach-Los Angeles office principal David Bales now reveals that the major industrial developer plans to leave the site as-is.
“The irony is that there were a lot of developers who are looking at this site to build a multi-tenant or a single-tenant building, but we are finding that there is a scarcity of land, especially in the South Bay, where you can do any kind of outside storage,” Bales tells GlobeSt.com. “From an investment perspective, the return on the land without a facility is just as rewarding to an investment group as what they would get if they put the a development on the site. The consensus for Prologis is that we can get a very nice return with them just for land.”
The only structure on the site is a 5,000-squre-foot office building and maintenance area. Bales received some steep competition for the site. “There are not many 10-acre sites out there,” he says. “We had offers on the property from people who both wanted to develop on it and people who wanted it for the land.”
Aside from the sizable land plot, the prime location was also an attractive draw. The site is located near the ports and offers rail access. “Proximity to the ports is crucial,” says Bales, who recently completed a $15-million lease agreement for a nearby 207-538-square-foot space with freight exporter PCC Logistics. That property is located in the overweight zone, and is also very attractive to potential buyers and tenants. “The South Bay is one of the most sought after industrial markets in the country,” Bales says. “Prologis was looking to expand their footprint in this market.”