COMPTON, CA-ProLogis has acquired two industrial buildings totaling 181,650 sf at the intersection of the Artesia Freeway and Alameda Street for $21.2 million from locally based IDS Real Estate Group. The two buildings include one of 138,650 sf for which IDS acquired the land three years ago and developed on a speculative basis.

Dan Sibson, senior vice president of Downtown Los Angeles-based IDS, explains that after IDS developed the 138,650-sf building, the L.A.-based development firm leased it to two tenants, PODS Enterprises and AIF Co. PODS supplies portable on-demand storage systems, and AIF is one of many logistics services firms that operate in the South Bay.

IDS developed the project to meet the demand for industrial space in the South Bay, where few development parcels are available, Sibson notes. The demand has pushed leasing rates for industrial space in the South Bay to the second highest in Los Angeles County, behind the San Fernando Valley.

In the latest market report from CB Richard Ellis, for example, industrial lease rates in the South Bay hit 66 cents per sf per month, triple-net, compared with a countywide average of 64 cents. Vacancy stood at 2% in the fourth quarter in the South Bay submarket, which accounts for nearly 223 million sf of the approximately 923 million sf of industrial space in Los Angeles County.

Sibson says that IDS identified ProLogis as a likely buyer for the fully leased investment given the Denver-based REIT's existing nearby industrial holdings. IDS was represented in the transaction by CB Richard Ellis brokers Kevin Shannon, John Schumacher and Scott Schumacher, with ProLogis representing itself.