Kearny, Morgan Stanley Form $100M Fund

LOS ANGELES-Kearny Real Estate Co. and Morgan Stanley Real Estate have formed a $100-million venture called the Kearny Industrial Fund that has acquired a 206,000-sf warehouse as its first asset. Tony Nobuyuki, VP at Kearny, reports that the fund paid $17 million for the property, which is a distribution building at 13827 Carmenita Rd. in Santa Fe Springs.Los Angeles-based Kearny created the fund to acquire a Southern California portfolio of underperforming and nonperforming class B core plus industrial projects of 100,000 sf or larger. It is looking for properties that "may be challenged by such issues as difficult loading or low clearance heights, environmental contamination, or bad debt," Nobuyuki says.The facilities at 13827 Carmenita Rd. serve as the Southern California trucking terminal for Helena, MT-based Watkins and Shepard Trucking. Built in 1956, the concrete tilt-up building is situated on nine acres zoned for heavy manufacturing. The building has 8,300 sf of office build-out, clear heights of 18 to 22 feet and 34 dock high plus three ground level doors.The sale was brokered by Cameron Driscoll, Luke McDaniel and John McMillan of Cushman & Wakefield, who represented both Kearny and the seller, an out-of-state private investor. Nobuyuki notes that, during the last year, Kearny has acquired 267 acres, representing $300 million of total project costs in four separate industrial property transactions.Kearny and other investors have shown keen interest in the Santa Fe Springs and other L.A. County industrial submarkets in recent years as the county heads for more than five straight years of tightening vacancies amid continued demand. The Santa Fe Springs market comprises more than 50 million sf of the county's more than 900 million sf of industrial space.