Speed Lands Rare Big Box Industrial

SANTA FE SPRINGS, CA—Custom Cos., a transportation and logistics company, has signed a rare 306,286-square-foot industrial lease at a warehouse facility in Santa Fe Springs. The building, which has an ESFR sprinkler system and 30-foot clear heights, is a rare find in the tight submarket. To win the deal, the tenant acted quickly, negotiating terms, performing due diligence and taking occupancy in less than 60 days.

“Custom Cos. needed to be within a close proximity to the ports due to their logistics needs, but the building itself is more important than the location,” Wesley Hunnicutt, a broker at Newmark Grubb Knight Frank, tells GlobeSt.com. “They are able to park north of 80 containers outside, which is a very unique asset to have in a building. We had to move quickly so that we could secure a building, and there was a lot of due diligence that we had to do in a short amount of time.” Hunnicutt represented the tenant along with his NGKF colleague Matthew Moore, while the Eric Knirk of Fremont Associates represented the landlord, Oltmans Real Estate Co.

The tenant, which took occupancy of the property July 1, is consolidating two other buildings totaling 80,000 square feet into this location and is increasing its space by and additional 200%. “Over the course of 30 days they secured a new account that required 150,000 square feet, but they also needed additional room for growth, based on their core business,” says Hunnicutt. The space was vacant for three months before Custom Cos. took occupancy. During that time, the landlord renovated the property and added an ESFR system to garner higher rents. Custom Cos.' 63-month lease is valued at $13.7 million. 

“This building is 30-foot clear with ESFR sprinklers, and the buildings that have those features are now bringing in rents north of $0.60 per square foot, triple net,” explains Hunnicutt. “The overall industrial vacancy is sub 4%, but if you look at buildings that are greater than 150,000 square feet that are 30-foot clear ESFR, those buildings are at 1.5% vacancy.”