Category Archives: Note

A brief writing. Industrial real estate related.

Container Jam at L.A. Port

There appears to be no sailing around the breathtaking backup of container ships off the jammed ports of Los Angeles and Long Beach.

Newly arriving vessels are adding to a record-breaking flotilla waiting to unload cargo that on Sunday reached 73 ships, according to the Marine Exchange of Southern California, nearly double the number a month ago and expanding a fleet that has become a stark sign of the disruptions and delays roiling global supply chains. 

Cargo Ship Logjam in Los Angeles Highlights Pandemic Supply-Chain Issues
An average of 30 container ships a day have been stuck outside the Ports of Los Angeles and Long Beach just waiting to deliver their goods. The backlog is part of a global supply-chain mess spurred by the pandemic that means consumers could see delivery delays for weeks. Photo Composite: Adam Falk/The Wall Street Journal

Before the pandemic, it was unusual for more than one ship to wait for a berth.

Big vessels are continuing to join the bottleneck, experts say, because shipping lines and their cargo customers have few options for resetting countless supply chains moving goods into the U.S. that have been constructed over decades around the critical San Pedro Bay gateway now staggered by the overflowing demand for imports.

Although some ships have headed to other import gateways, and a handful of shippers have chartered smaller vessels to move goods through other ports, the diversion is minor compared with the hundreds of thousands of containers idled in the waters off Southern California.

“Everything is aligned to L.A.,” said Nathan Strang, senior trade lane manager for ocean operations at Flexport Inc., a San Francisco-based freight forwarder.

The congestion this year has been caused by a surge in imports as consumer demand in the U.S. has shifted away from services to goods and home improvements and retailers have rushed to restock inventories that were depleted last year in the early months of the pandemic.

The neighboring California ports are the principal seaborne gateway to the U.S. thanks to the growth of containerization over the past 60 years and an explosion in goods trade, particularly U.S. trade with China. Last year, the two ports handled the equivalent of 8.8 million loaded import containers, more than double the 3.9 million loaded boxes that arrived at the nation’s next busiest port at New York and New Jersey.

The California ports are in easy range of China and the factories that churn out big volumes of electronics, apparel and an array of other consumer goods. They have enough land to house dozens of cranes capable of emptying large ships as well as sprawling terminals to store boxes.

Container ships outside the Port of Oakland. Smaller ports like Oakland and Seattle can handle just a fraction of the containers processed at the ports of Los Angeles and Long Beach.Photo: Justin Sullivan/Getty Images

For the retailers that are among the major importers at Los Angeles and Long Beach, the ports offer quick reach to one of the largest population centers in the country. That means they can split arriving goods between a large local consumer base and rail links that offer steady, direct transport to the rest of the U.S. through inland hubs, with most of the boxes heading through Chicago.

Despite some shortages, the availability of trucking equipment, warehouse space and labor is also far greater than at other ports.

Shipping executives say other West Coast ports, like Oakland or Seattle, simply aren’t large enough to handle the hundreds of thousands of containers that Los Angeles and Long Beach unload, store and move by truck or rail each week.

“It would just take a very small portion of  L.A./Long Beach to overwhelm those ports,” said Craig Grossgart, senior vice president of global ocean for Seko Logistics, an Itasca, Ill.-based freight forwarder.

Above text excerpted from WSJ article.

Best SoCal Industrial MLS

The AIR CRE is the premier multiple listing service for industrial real estate such as warehouses and manufacturing buildings in Southern California. Whether you are a buyer or tenant or landlord or seller, this MLS is the service that all the top-tier brokers primarily use. It services industrial, office, retail, and other commercial real estate listings.

There are over 33,000 listings in the system for SoCal. And there are over 1,600 members in SoCal. So if you seek to search or list for sale or lease a warehouse or other commercial property in Los Angeles, Orange, San Bernardino, Riverside or Ventura counties, contact us as we are members of this MLS.

LoopNet, which is owned by Costar, is a second-tier MLS that we also use but it’s data pales in comparison to the AIR CRE and top firms mainly use it as a secondary marketing tool but don’t always put their listings there. The most active and major Los Angeles commercial real estate brokers use the AIR CRE, which is member owned and created in 1960.

AIR CRE

6th Street Viaduct

Constructed in 1932, the original Sixth Street Viaduct (also known as the Sixth Street Bridge), was an important engineering landmark in the City of Los Angeles. It was one of a set of fourteen historic structures crossing the Los Angeles River, and the longest of these structures.

Due to its large size, the original Sixth Street Viaduct was constructed using an onsite concrete mixing plant. Unfortunately, the aggregate used in the concrete caused a chemical reaction known as Alkali Silica Reaction, which caused deterioration of the concrete structure within 20 years of its completion. The total project replacement cost is $488 million, making it the largest bridge project in the history of Los Angeles.

Located in a highly urbanized area just east of downtown Los Angeles, the original bridge acted as a critical transportation link between the neighborhoods of the Arts District on the west side and Boyle Heights on the east side. 

The original viaduct was demolished in 2016. The new viaduct is scheduled for completion in 2022.

The 6th Street PARC is scheduled for completion in 2024 where there will be 12-acres of open and recreational space under the viaduct, including access to the LA River, an arts plaza, public art and numerous community amenities.

Amid exclamations like “I am going to be so happy to see the bridge completed!”, the most common questions on social media were about pedestrian and bike lanes and general accessibility. The wide and separate sidewalks and bicycle lanes planned for both sides of the bridge met with high praise. https://www.sixthstreetviaduct.org

Types Of Industrial Properties Explained

Industrial is 1 of 4 commercial property types (Industrial, Retail, Office and Multi-family) and is a broad category encompassing many different types of buildings with the most common being warehousing and distribution or manufacturing. Below are brief descriptions of 8 industrial property types.

Industrial warehouse and distribution building for Amazon.

Warehouse / Distribution

Warehousing & Distribution buildings are very large, single-story structures used primarily for warehousing and the distribution of business inventory. These buildings range from 5,000 to hundreds of thousands of square feet under roof and have up to 60-foot ceiling heights to accommodate extensive racking and storage systems. These buildings may have a small amount of office space as numerous loading docks, truck doors and large surface parking lots to semi-trailers. Some buildings may be served by rail cars.

Manufacturing

Manufacturing facilities (also called heavy industrial buildings) are designed to house specialized equipment used to produce goods or materials. In addition to providing three-phase high capacity, electric power, these industrial properties may include heavy ductwork, pressurized air or water lines, buss ducts, high capacity ventilation and exhaust systems, floor drains, storage tanks and cranes. A subset of this is food manufacturing which often includes refrigeration, clarifiers, boilers, sloped floors for drainage, and other specialized food facility equipment.

Refrigeration/Cold Storage

Refrigeration/Cold Storage are specialized industrial buildings that offer large capacity cold storage such as cooler (34 deg F) and freezer (-10 to 0 deg F) rooms. They are often used as a distribution center for food products such as meat, produce, prepared meals, dairy, etc…

Flex

This versatile building type (short for “Flexible”) covers a broad range of uses and often is used to combine one or more uses in a single facility, including office space, research and development, showroom retail sales, light manufacturing research and development (R&D) and even small warehouse and distribution uses. Because of this versatility, flex buildings are sometimes listed as separate category. Flex buildings typically have ceiling heights under 18 feet and have a higher percentage of office space than larger industrial buildings.

Light Manufacturing

Flex buildings can be used for light manufacturing that do not require extensive physical plant and space requirements that heavy industrial buildings provide; such as light assembly.

Showroom

Similar to flex/office buildings in basic construction and layout, showroom buildings combine retail display space with extensive onsite storage and distribution. Typically up to 50% of the interior space in showroom buildings is dedicated to sales.

Telecom / Data Hosting Centers

These are highly specialized industrial buildings located in close proximity to major communications trunk lines with access to an extremely large and redundant power supply capable of powering extensive computer servers and telecom switching equipment. These buildings have reinforced floor slabs capable of supporting the weight of the electrical and computer equipment as well as backup generators, and specialized HVAC. They may also include raised flooring to handle cooling and extensive cabling. These buildings may also be called Switching Centers, Cyber Centers, Web Hosting Facilities and Telecom Centers.

R&D

Flex buildings are popular in high technology industries such as computers, electronics and biotechnology because they effective support a hybrid of office, manufacturing and warehouse space housed in a single location. Often these types of space users prefer locating in campus-like business parks featuring extensive landscaping, shared architecture design, and lots of surface parking and open space.

Biotech (Wet Lab)

Biotech buildings are highly specialized flex buildings that support a range of laboratory space where chemicals, drugs or other material or biological matter are tested and analyzed. This type of building requires extensive plumbing and water distribution, direct ventilation and specialized piped utilities. In addition, some may offer accurate temperature and humidity controls, dust control, and heavy power. Often these types of buildings are located together in campus-like fashion with extensive landscaping, extensive surface parking and open space.