14-Acre Industrial Development Site in Long Beach Trades Hands

A rare 14-acre industrial development site in Long Beach, California, has traded hands. Plains All American Pipeline sold the property for $50.7 million to an undisclosed buyer.

Located at 5900 Cherry Avenue in Long Beach, the 14-acre property can accommodate a 304,432-square-foot industrial property. The buyer plans a state-of-the-art property featuring 36-foot minimum clear heights, ESFR sprinkler systems, ample truck courts and significant excess trailer parking.

It is rare for new buildings of this caliber and size to come to market in the South Bay. According to research from Newmark, the Los Angeles industrial has the second-lowest industrial vacancy rate in the U.S., at 1.1% as of year-end and the vacancy rate has been below 3% for 39 consecutive quarters. This property is centrally located near 18 million consumers, plus access to the Long Beach Airport and the I-405, I-605 and I-710 freeways.

Due to the dearth of supply and developable land, many developers are converting other properties with proper industrial zoning into warehouse space to increase supply. new JLL report titled Finding Any Opportunity to Build highlights the trend toward industrial conversion projects as one way to deliver new supply to market despite limited availability of land. This year, 12 industrial conversion projects have broken ground or been announced, and office buildings in industrial-zoned areas are the prime candidate for such projects, according to the report. Orange County is home to the largest number of industrial conversion projects with nine of the 12 projects underway. All 12 projects will deliver 160,000 square feet of industrial space to the market, helping to ease the record low 1.3% vacancy rate, although only adding a small fraction of space to the total supply.

While development is rare, some developers are finding opportunities. Ocean West Capital Partners acquired Smoky Hollow Flex Campus, a 152,000 square foot flex industrial building, in an off-market deal. Located on 5.1 acres in the Smoky Hollow area of El Segundo. The firm plans to redevelop the 1960s vintage property with upgrades to the exterior, new landscaping, parking facilities, building systems, outdoor recreation spaces and the construction of a new building.

In the Long Beach transaction, Newmark executive managing directors Andrew Briner, Jim Linn and Bret Hardy and co-dead of U.S. capital markets Kevin Shannon represented the seller, along with vice chairman John McMillan and senior managing director Danny Williams.