Seventh Street Sales Total 120,000 SF

LONG BEACH, CA-Seventh Street Development has sold seven industrial buildings totaling 120,000 sf for $16.5 million and has two others in escrow. The locally based company sold buildings in San Bernardino, Pomona and Irwindale in transactions that indicate what the company describes as continued buyer demand for small and midsized industrial buildings.

Seventh Street principal Craig Furniss says that "while the havoc in the capital markets appears to be spreading to commercial from the residential sector," the sales at Seventh Street's three properties illustrate not only the continuing demand for small to midsize industrial buildings, but the availability of financing for such product.

"There are certainly some concerns about where the economy is headed, but the demand for industrial space is still strong, although it can best be characterized as going from white hot, to just plain hot," Furniss says. He adds that small, fast-growing companies "are continuing to drive the Southern California economy, which helps to explain why well-located industrial submarkets offering this type of product continue to enjoy extremely low vacancies."

The buyers of the Seventh Street buildings have been a mix of users and investors. For users, the availability of SBA financing means that buyers of smaller buildings are not hindered by the more conservative underwriting that has followed the capital crunch.

"We are also seeing savvy investors with existing banking relationships or cash who are attracted by industrial's low vacancies and rising leases rates, especially in submarkets where there is no new supply on the horizon," Furniss says.

In two separate transactions, Seventh Street sold buildings of 16,237 sf, 12,820 sf and 9,574 sf to two private investors at its newly opened Waterman Business Center in San Bernardino. The 191,000-sf industrial park was completed this month and has remaining units sized from 2,000 sf to 13,675 sf.

A third of the buildings at Waterman were sold or in escrow before project completion, and deals are in the works that include sales, leasing and purchase options, according to Herrick Johnson of Lee & Associates, who represented Seventh Street in the recent deals. Seventh Street was also represented by Alexey Zabolotskikh of Lee & Associates and John Bosko of NAI Capital, with the buyer represented by Frank Artura of TVM Commercial Realty.

The fourth Seventh Street building to sell was acquired by RJ Sports, a manufacturer and distributor of golf and sports bags. RJ will relocate its headquarters and distribution facility from Chino to Seventh Street's just completed Mission 71-Business Park in Pomona, where it bought a 16,703-sf warehouse building on nearly an acre of land.

The first phase of the master planned Mission-71 Business Park, which fronts the Chino Valley Freeway (71) near the US Interstate 10 and California 57 freeways, was also completed this month by Seventh Street. Phase one includes 11 buildings ranging from 16,534 sf to 60,813 sf.

Seventh Street was represented by the CB Richard Ellis team of Lynn Knox, Barbara Emmons, John Privett and Lynn Eisenhower. RJ Sports was represented by Brad Yates of Grubb & Ellis.

At Speedway Business Park in Irwindale, CD and DVD manufacturer I-Pak DVD, a subsidiary of Arion International, acquired three freestanding buildings totaling 64,570 sf from Seventh Street. Seventh Street was represented by Mitch Ashwill of Ashwill Associates, and I-Pak was represented by Jonathan Fan of Remax 2000 Realty.