Tag Archives: los angeles

American Apparel To Continue Operations in Downtown L.A.

Clothing Maker Inks 10-Year Deal With Landlord Meruelo Maddux

The Downtown-based garment maker American Apparel has reached a 10-year agreement with landlord Meruelo Maddux Properties to stay in its 800,000-square-foot, Warehouse District headquarters, according to American Apparel financial filings.

Although American Apparel’s lease expired in December 2008, it has continued to occupy the pink factory building at Seventh and Alameda streets. The extension comes more than fourth months after Meruelo Maddux, Downtown’s largest landlord, entered bankruptcy.

Prior to reaching the deal, American Apparel, which employs about 5,000 workers at the 747 Warehouse St. factory, was mulling a move. The company considered an old Boeing plant in Long Beach, among other potential new homes, said their real estate broker.

“There were other considerations, other buildings to look at, but Meruelo stepped up,” he said.

American Apparel represents Mereulo Maddux’s largest tenant, both in terms of the size of its space and the value of its former lease.

Terms of the new lease were not disclosed.

American Apparel CEO Dov Charney said the lease was agreed to this month, but declined to comment further on the deal. Richard Meruelo, CEO of Meruelo Maddux, could not be reached immediately Tuesday afternoon.

In addition to housing almost all business operations, the factory has also served as a massive billboard for the company to promote itself and its progressive, often immigration-oriented political messages. American Apparel can also now safely cling to its various mottos touting its “Made in Downtown L.A.” cache.

The building’s sprawling parking lot is also known as the site of festive blowout warehouse sales that draw thousands of young buyers looking for discounted t-shirts, leggings, short shirts and underwear.   by Ryan Vaillancourt, Staff Writer, Downtown News.

Forever 21 Purchases Two Large Buildings

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.

Vernon Livestock Rendering Plant

Animal Fat Recycling Plant, Food Processing, Vernon, CaliforniaLos Angeles Magazine has written a lengthy article about Baker Commodities, a livestock rendering plant based in the City of Vernon, California, near Downtown Los Angeles.  It is the oldest rendering business in L.A. and the largest on the West Coast.  In 2008, some 250 U.S. rendering plants like Baker took in 54 billion pounds of killed livestock—blood, bone, guts, legs, hide, muscle, and head, the detritus of slaughter—warmed the raw material in cookers, and squeezed out a clear liquid called tallow.

Baker seizes on fat wherever it can: dairy cows that have died in the heat of the Central Valley, the trimmings left over from the purchase of a Niman Ranch roast at Whole Foods, steaks and chickens whose shelf life at Pavilions has expired. The company retrieves grease from deep fryers at McDonald’s and the drippings of ribs in the Vons hot section. Rendering is the most elemental form of recycling, the regeneration of the dead into soap and scented creams. It has existed for millennia in societies, and its reach in modern America is staggering. We live in a vast cycle of fat reclamation, one that stretches from the killing floors of the Midwest to our medicine cabinets, making a stop along the way at the local Burger King.

Every restaurant and fast-food stand in L.A. has a fat reservoir called a grease trap, usually secreted under the parking lot. A trap may strain as much as 15,000 gallons of liquid fat from a kitchen’s drains, though the speed at which it fills depends on what’s cooking upstairs. A Burger King trap can take three months to fill, while an El Pollo Loco trap might need to be emptied in weeks. There are tens of thousands of grease traps citywide, each a promising revenue source for rendering companies. Baker taps around 8,000 of them.

Biodiesel!  About 40 pounds of good ground beef heated to 250 degrees will produce enough tallow to make a gallon of biodiesel. The process is insanely wasteful if cattle are raised for it alone; you’d need to boil an entire cow to fill your Chevy Volt. Yet there’s no shortage of cow remnants in slaughterhouses, and U.S. production of biodiesel from renderers has grown from 78,000 metric tons in 2007 to 400,000 metric tons in 2008.

Full article.

Industrial Activity Slow But Steady

The Southern California industrial market continues to exhibit consistent demand for tenant space and strong occupancy levels.   The five-county area, which consists of approximately 1.7 billion square feet of industrial space, maintained a low vacancy rate averaging approximately 3%.

The economic climate is posing many challenges to the Los Angeles county as well as the Industrial Market;p however, the fundamentals remain in place for strong performance in the marketplace.
Capitalization Rates for industrial investment properties hovered just below six percent.  Vacancy remains low in the 3-5% range, but several points higher in the Inland Empire.  Many brokers have seen a 20-30% decline in transaction volume and demand.

More specifically, Gross Absorption is 50% compared to a year ago, with 2008 Q1 at 2.2 million versus 2007 Q1 at 4.1 million for the Central Los Angeles area.  The Central Los Angeles Market is the largest industrial base in Los Angeles County.  The Central Market remains one of the tightest and strongest submarkets in the region with little if any new construction due to the high cost and low availability of land.

To some degree, reduced container traffic has contributed to the diminished demand.  Containers handled at the ports of Los Angeles and Long Beach were down 5.6% and imports sunk 5.9%, while exports increased 22%.  Lease rates have held steady though.  Although, tenants are demanding more concessions in the form of free rent and tenant improvements.