Lucky Tenants Finds 200,000SF Industrial Build

LA MIRADA, CA—Giant Bicycle has signed a 203,510-square-foot lease at a class-B industrial facility in La Mirada. The company is relocating from a 106,000-square-foot facility in Cerritos, nearly doubling its size due to company expansion and rising sales. Originally hoping to delay the move until next year, the rising rental rates and tight market supply—with very limited options for 200,000-square-foot-plus spaces—prompted Giant Bicycle push up the move.

“Originally, they were going to kick the expansion requirement out until next year, however, with the scarcity of available buildings and the spike in lease rates, they decided to move forward now,” Luke McDaniel, a broker in JLL's Orange County office, tells GlobeSt.com. “There are also very few buildings in the 200,000-square-foot size range that are available. This building was a good class-B building with 24-foot clear, good dock-high loading and great functionality. It was a question of taking the building now or waiting for the market to increase another 5%. They have a need for the space, so they were able to lock in early.” McDaniel represented the tenant in the transaction, along with his colleague Cameron Driscoll. INCO Commercial Brokerage represented the landlord, Oltmans Real Estate Services.

The tenant will take occupancy of the new space in November. In the meantime, the landlord is completing a tenant improvement plan, which includes repainting the interior and exterior, general refurbishment and building out 4,500 square feet of office space. Giant Bicycle's current industrial space is only a few miles away, so this move won't affect its employees. “They are very conscious of their employees commute,” says McDaniel.

La Mirada is in the mid-counties industrial market, which has a sub 2% vacancy rate and limited options for anyone looking for a larger facility, like this one. “There are only two buildings at or above 200,000 square feet that are available in the mid-counties sub market,” adds McDaniel. “The market is extremely tight with very few options for tenants, and because of this, we are seeing the market rates continue to increase. Full leverage is on the landlord side of the equation.” Although the lease rate wasn't available for this property, McDaniel says that a similar property would lease for low $0.50 per square foot, triple net.

Earlier this year, O'Neill Logistics scoped up a 300,000 square foot class B industrial facility in the nearby Santa Fe Springs market. McDaniel represented the landlord in this transaction, explaining at the time that this was also one of the few properties of this size available in this market.