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CITY OF INDUSTRY, CA-Logistics firm Hudd Distribution Services Inc. has signed a three-year lease renewal for 700,000 sf at the Fullerton Road Industrial Park here and Target Corp. has renewed for 675,000 sf in Ontario in the latest in a series of large distribution deals that are keeping industrial space tight in the Los Angeles Basin. Hudd’s deal is for $8.6 million with landlord Majestic Realty in a transaction brokered by Cushman & Wakefield; Target’s deal is a one-year lease for $2.6 million with Majestic Airport Partners in a transaction arranged by CB Richard Ellis.

Hudd’s City of Industry facility is composed of two separate 350,000-sf buildings at 18175 and 18215 East Rowland St. The distribution center is the largest in the South Gate-based third party logistics firm’s national network, which also includes five other facilities in California.

Cushman & Wakefield’s Stu Milligan and Sean Scott in the firm’s Downtown Los Angeles office, along with Terry Evans, Scott Evans and Tristan Tams in Cushman & Wakefield’s Ontario office, represented Hudd Distribution. Majestic Realty was represented in-house by Terry Baker and Kent Valley.

The Hudd transaction is the kind of deal that has kept the market tight in the 74-million-sf San Gabriel Valley industrial submarket, where the vacancy rate is 2%, according to Cushman & Wakefield statistics. The San Gabriel Valley submarket, one of the strongest in Southern California, includes the City of Industry, West Covina and La Puente.

The Target Corp. lease is unusual in that it is for only one year to fill a short-term need for storage during the Christmas holiday season, a move that is expected to help Target circumvent anticipated port gridlock and delays as the holiday season approaches, according to CBRE. The lease, valued at $2.6 million, is for space in a facility at 2900 E. Jurupa St. and includes three one-year options to extend. The options make the lease potentially a longer term solution to the increasing need for warehouses to store imported merchandise, according to CBRE brokers Frank Geraci and Walt Chenoweth, who represented Target along with CBRE’s Dan de la Paz. Majestic Airport Partners represented itself.

The Target lease could be a sign of things to come, according to de la Paz, who notes that companies renting holiday distribution space in the past typically required holiday overflow space only three to four months ahead of the season. “This year, we’re seeing that time frame move up to about a year ahead as a result of increasing port gridlock,” de la Paz says. Retailers now have to begin storing holiday merchandise well in advance of the holidays to avoid port delays, he explains.

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