The City of Los Angeles is in the process of updating its land use plans. These plans are the way the City plans for the future. The Draft Boyle Heights Community Plan Update is the blueprint for guiding this change. For a PDF of the plan see Boyle Heights Zoning Plan Update. Note the industrial section known as The Flats, on the left side of the image, is being rezoned from Industrial to an Innovative zone. This may be a riff from the CASP multi-zoned ordinance passed for the area north of DTLA near LA State Park, the cornfield.
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.
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 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 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…
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.
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.
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.
Soundstages – Film & TV Production
Soundstages are sometimes built new for film and TV production and other times developers retrofit industrial buildings. These facilities typically have ceiling heights over 30 feet with concrete tilt up walls along with ancillary offices and a commissary for film crews to eat.
The secondary market for commercial real estate is just beginning to show new life, with the first successful sale of a commercial mortgage-backed securities (CMBS) package in over a year and several new issues in the wings spurred by the strong investor interest on that initial offering. But the positives of renewed activity are tempered by more bad news on the performance of those commercial bond deals made before the freeze.
According to a new report from commercial research provider Trepp, delinquent loans in commercial mortgage securities jumped 85 basis points to 5.65 percent at the end of November. That figure is up from just 4.8 percent a month earlier.
The delinquency rate was highest in the hotel sector, where defaults skyrocketed from 8.67 percent in October to 14.09 percent in November. According to Trepp, the upsurge came from a single Extended Stay Hotel loan. Without it in the mix, the hotel delinquency rate would have increased only 64 basis points, to a little over 9 percent.
Based on Trepp’s analysis, delinquencies on multifamily CMBS loans rose to 8.78 percent in November, up from 7.66 percent the previous month. All other sector’s showed slighter increases. Retail edged up from 4.53 percent to 4.78 percent. Industrial increased from 3.18 percent to 3.33 percent. Office loan delinquencies crept up from 3.08 percent to 3.14 percent.
Trepp says there were $65.2 billion in CMBS loans in special servicing at the end of November, an increase of $8.2 billion, or 14 percent, compared to October. There are very few CMBS related distressed properties in the Los Angeles area. from dsnews.com. image from wsj
Of $25.7 billion in distressed assets, the Western U.S. takes $10 billion. However, the good news is that of all commercial property types in the U.S., Industrial has the lowest distressed amount of $700 million out of $25.7 billion, compared the higher amounts of Office, Retail, Apartment (multi-family), Hotel, and Development. Industrial includes warehouse and manufacturing buildings. According to Real Capital Analytics Troubled Asset Radar.
Some of the owners of the distressed or potentially distressed properties are taking preventative measures and seeking bridge loans prior to their primary loans expire. Many bridge loan terms max out at 18 months and have interest rates from 10-18%.
When new lamps are installed in industrial buildings, 3 types of lighting technology are used.
The technology in high intensity discharge (HID) lighting is in some ways similar to fluorescent technology: an arc is established between two electrodes in a gas-filled tube which causes a metallic vapor to produce radiant energy. In this case, however, a combination of factors shifts the wavelength of much of this energy to within the visible range, so light is produced without any phosphors. In addition, the electrodes are only a few inches apart (at opposite ends of a sealed “arc tube”) and the gases in the tube are highly pressurized. This allows the arc to generate extremely high temperatures, causing metallic elements within the gas atmosphere to vaporize and release large amounts of visible radiant energy. There are three main types of HID lamps: mercury vapor, metal halide and sodium. The names refer to the elements that are added to the gases in the arc stream which cause each type to have somewhat different color characteristics and overall lamp efficiency.
Ballasts and Warm-Up Time:Like any gaseous discharge light source, HID lamps have special electrical requirements that must be supplied by a ballast. With HID sources, however, the ballast must be specifically designed for the lamp type and wattage being used. In addition, HID lamps require a warm-up period to achieve full light output. Even a momentary loss of power can cause the system to restrike and have to warm up again—a process that can take several minutes. In applications where constant illumination is important for safety and security, a backup system is often required.
Metal Halide Lamps: Metal halide lamps are among the most energy efficient sources of white light available today. These lamps feature special chemical compounds known as “halides” that produce light in most regions of the spectrum. They offer high efficacy, excellent color rendition, long service life and good lumen maintenance. Because of their numerous advantages, metal halide lamps are used extensively in outdoor applications and in commercial interiors.
Sodium Lamps: High-pressure sodium sources were developed primarily for their energy efficiency. Mercury and sodium vapors in the ceramic arc tube produce a yellow/orange light with extremely high LPW performance and exceptionally long service life (up to 40,000 hours). High-pressure sodium lamps render colors poorly, which tends to limit their use to outdoor and industrial applications where high efficacy and long life are priorities. Since these lamps produce light at only one wavelength in the yellow region of the spectrum, they are used where energy efficiency and long life are the only requirements.
Mercury Vapor Lamps: Mercury vapor lighting is the oldest HID technology. The mercury arc produces a bluish light that renders colors poorly. Therefore, most mercury vapor lamps have a phosphor coating that alters the color temperature and improves color rendering to some extent. Other HID types that offer higher LPW and better color properties have largely superceded the use of this lamp.