TriMas Corp. sells a 22-acre site at 5215 S. Boyle Ave. in Vernon to AMB Property Corp. Originally developed from the 1940s through the 1960s to support Norris Industries defense operations, 5215 S. Boyle Ave. includes more than 400,000 square feet of heavy manufacturing buildings with several existing leases currently in place.
According to an SEC filing, the purchase price was for $13 million, all cash. AMB would not confirm the price. AMB plans to market the vacancies at the property in the short-term with a long-range goal of repositioning the site in order to maximize the significant upside potential in the land enhancing the value of the parcel.
The purchase represents AMB’s first development project in Vernon, a city that consists almost entirely of industrial properties located approximately five miles southeast of Los Angeles. The city is home to more than 1,800 businesses which employ approximately 50,000 individuals. Vernon also consistently boasts one of the lowest vacancy rates in the greater Los Angeles area.
AMB purchased the site for substantially below current land sale value for clean & graded sites ready for construction.
Forever 21, the large garment manufacturer of young women’s clothing, has acquired two large buildings in the past year. The first building is the 370,000 square foot Overland Terminal facility at the intersection of Alameda St and Olympic Blvd in Downtown Los Angeles with a price of $20 M. This multistory building has parking and dock high loading. The second purchase was in the City of Vernon on Sierra Pine Ave. This collection of several Class B buildings totals near 130,000 square feet. Forever 21 was the tenant in the buildings and the sale price was approximately $6.5 M.
The company is based in Downtown Los Angeles and occupies several hundred thousand square feet of buildings at Alameda St and 20th St.
The Vernon City Council passed a resolution to increase the Special Parcel Tax rate from $.20 to $.22 per square foot of land. Expect annual increases of two cents. It applied to properties containing non-refrigerated warehouse uses, truck and freight terminal uses and other distribution uses.
The City of Vernon recently acquired the 11 acre Smurfit-Stone (formerly Container Corp) site on 57th Street, after the container manufacturer decided to close the Vernon plant and consolidate operations into other facilities. The City expects to have a contractor demolishing the existing facilities on the site beginning later this month. The City’s Industrial Development staff is currently in discussion with several large manufacturers about future use of the site.
The City has purchased several large land sites over the past several years in order to control the destiny who occupies the sites. The City prefers companies that manufacture, employ more persons than warehousing operations, and that use copious amounts of the power that the City sells. This interference by the government in the free market of real estate deals definitely rubs some people the wrong way.
The Central Los Angeles industrial real estate market encompasses approximately 300 million square feet of building area. This market includes the well-known submarkets: City of Vernon, City of Commerce, and Downtown Los Angeles. It should be noted that the following areas on the periphery to Downtown are also included in the Central LA market: Lincoln Heights, Glassell Park, City Terrace, East L.A., Boyle Heights, South Industrial, and the Goodyear Tract. In the Central LA submarket buyer and tenant demand remains strong compared to outlying markets. In fact, the Central submarket remains the tightest metropolitan industrial market in the nation. This submarket is an infill market and very little new construction occurs on empty industrial land (with almost no construction on other types of commercial real estate such as retail and office). The Central LA market is also the largest industrial real estate submarket in Los Angeles County.