ANAHEIM, CA—Wholesale flooring distributor Longust Distributing has signed the first lease at Anaheim Concourse, 1.4-million-square-foot, master-planned project currently in development by Panattoni Development Co. and Clarion Partners. The tenant, which serves the Southwest, has signed a 10-year, 93,818-square-foot industrial lease at the project and will occupy the space upon completion in 2015 as its Southern California distribution center.

JLL Orange County's senior managing director Louis Tomaselli, SVP Zach Niles and SVP Steve Wagner represented Longust in the transaction, while the landlord JV was represented by CBRE's SVP Brad Bierbaum. Tomaselli says, “After a comprehensive market analysis, supply-chain and logistics study, Longust decided that leasing state-of-the-art space at Anaheim Concourse was the most cost-efficient alternative based on its 32-foot clear ceiling height, ability to rack five high,  the most accessible transportation network and the ability to remain in the business-friendly city of Anaheim. While the Orange County industrial market continues to tighten, JLL was able to negotiate lease terms that provided flexibility for growth and cost savings based on effective use of cube height.”

Tomaselli adds, “Orange County, along with Southern California, has broken through 2008 historical, pre-recession vacancy lows and lease-rate highs. Orange County in particular is anticipated to enjoy strong occupancy levels based on the continuing story of strong and stable tenant- and owner-occupier demand, complemented with a limited amount of new supply coming online. Currently, the Orange County industrial market has a second-quarter direct vacancy of 4.1%.”

Industrial space of the size Longust needed is scarce in Orange County. Tomaselli tells GlobeSt.com, “As of Q4 2014, based on a 260-million-square-foot industrial base in the OC, there are only five alternatives that offer 30-foot or greater clear heights with 90,000 square feet to 216,000 square feet. There are seven alternatives under construction or planned with 30-foot clear heights offering 95,000 square feet to 367,000 square feet. This is a less-than-1% vacancy rate in each sector. There is a 200-basis-point or greater delta between class A and class B/C space, meaning 2.63% vacancy for class A and 4.72% for class B/C. We have reached the landlord-leveraged market condition we have anticipated for the past three-plus years.”