CITY OF INDUSTRY, CA-Owner-users here and in Pomona haveacquired two industrial buildings totaling more than 319,000 for atotal of $18 million, according to CB Richard Ellis brokers whowere involved in the sales. In the City of Industry, American Paper& Plastics acquired a 296,960-square-foot building at 500 S.Seventh Ave. for $15.3 million , and in Pomona, Maxxsel Apparelbought a 22,135-square-foot building at 1613 W. 2nd St. for $2.7million.

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The City of Industry deal ranks as the largest industrial salein the San Gabriel Valley in 2010, according to the CBRE team ofDavid Fults, Kevin Shannon and Todd Tydlaska who represented theseller, iStar Financial. American Paper & Plastics plans tooccupy half of the building in a relocation from its headquartersin El Monte.

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Shannon describes the sale as, "another example of an owner-userlooking for an opportunity to buy an investment-quality buildingrather than continue to lease space." This is an increasing trendwith owner-users, who have accounted for approximately 33% of allmajor office and industrial sales since 2009, Shannon pointedout.

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The buyer was able to purchase the property at a substantialdiscount to replacement cost in a supply constrained submarket withsignificant economic and physical barriers to entry, including alack of new construction and scarcity of available land, accordingto Fults.

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The building, which had been on the market since late 2008, was100% occupied at the time of sale. American Paper will retain theexisting tenant for a portion of the building, thus generating arevenue stream for that portion, Fults points out.

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In the Pomona transaction, Maxxsel Apparel bought its newbuilding from Long Beach, CA-based Seventh Street Development atthe Mission-71 Business Park. The buyer was represented by CBRE’sKevin Herron; the seller was represented by CBRE’s Lynn Knox,Barbara Emmons, John Privett and Lyn Eisenhower.

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Maxxsel Apparel, a wholesale company for leather apparel,jackets and shirts, had been looking to lease a smaller buildingthan the one it occupies in Baldwin Park. However, according toHerron, the buyer ultimately decided that by acquiring a buildingat a time of record low pricing and low financing rates availablethrough SBA, it could achieve a mortgage payment below what itwould be paying on a lease.

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“At this point in the market cycle, we’re seeing more companiesbuying instead of leasing to take advantage of values created inthe recent recession,” Herron said. “The availability of aggressiveSBA financing is helping to bolster this segment of themarket.”

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With the most recent sale to Maxxsel Apparel, Seventh StreetDevelopment has sold nine of the 11 buildings at the Mission-71Business Park, bringing the project’s first phase to nearclose-out. Other recent buyers in the business park include DawsonCompany, a manufacturer and distributor of residential, commercialand industrial plumbing, heating and cooling equipment; ExcellenceOpto Inc., a company that makes light-emitting diode lamps fortraffic lights and street lights; and Martin Purefoods Corporation,which specializes in the distribution of Filipino foodproducts.

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Phase II of the Mission-71 Business Park has been approved bythe City of Pomona and will feature 1,500 lineal feet of freewayfrontage on the 71 Freeway, just north of Mission Boulevard. Thesecond phase will consist of three separate buildings of 42,000,51,000 and 120,000 square feet that will be offered for sale orlease.

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