Pair of Buildings Add 425,000 SF in South Bay

CARSON, CA-Watson Land Co. has completed a $28-million pair of cutting-edge “Legacy Buildings” here, bringing more than 425,000 sf of new space to a South Bay industrial market that has recently been sluggish.

The larger of the two buildings stands on Harmon Avenue, inside Watson’s sprawling Dominguez Technology Center. It has 247,790 sf and is valued at $16 million.

The other building offers 177,400 sf and is located on 220th Street, inside the nearby Watson Corporate Center. It is valued at about $12 million.

Watson’s Legacy Building line is different from most other types of industrial structures, says Kirk Johnson, the locally based developer’s VP of real estate operations. They feature minimum 32-foot clear heights instead of the traditional 30-foot height, along with lots of skylights and thicker floor slabs to help conserve energy.

Adding a couple of extra feet to a building’s height allows tenants to stack their merchandise or other goods higher, says Johnson, which means they can get extra storage space without increasing the amount of the square footage they lease. “By adding just two feet, we provide our customers with greater cubic storage capacity while operating costs remain static,” Johnson says.

To further reduce operating costs, the buildings feature 50% more skylights than thetypical new industrial building as well as several clerestory windows that Johnson says provide 50% more natural light. Additional savings are generated through power-saving rooftop heating- and ventilation-systems, automatic controls on interior warehouse lights and other features.

Johnson says such features, along with the fact that the buildings are also flexible enough to be used as office space, should help the developer’s marketing efforts. Several prospective tenants have already expressed interest in the structures, he adds, though he won’t say who they are.

Still, filling the new space won’t necessarily be an easy task than can quickly be accomplished. Leasing activity in the South Bay has slowed in lockstep with the economy, and cargo volume at the twin ports of Los Angeles and Long Beach—which some consider a harbinger of future business—has dropped dramatically in recent months.

The South Bay’s industrial direct vacancy rate of 5.1% in the third quarter was among the highest of any LA area market, according to a report by CB Richard Ellis. Moreover, its 9.1% rate after space available for sublease was factored in was the highest in the entire county.