Long Beach, CA-based Seventh Street Development on May 8 broke ground on the third phase of the 1.5 million-sq-ft Mission 71 Business Park, located in Pomona, about 30 miles east of Los Angeles.
Covering 245,000-sq-ft, the new building will be the largest industrial building built in the San Gabriel Valley in the past three years, says Craig Furniss, principal of Seventh Street. The building will serve as a corporate headquarters, as well as a manufacturing warehouse for Kittrich Corporation, a maker of household products, who will relocate from La Mirada, CA.
Furniss, whose company currently has about 1 million sq-ft of industrial product underway in various stages in the area, says limited supply of high quality industrial buildings for sale or lease within the Valley, combined with an increasing demand for new industrial product led to Seventh Street’s to move forward with the project.
As recently as 2006, we had a severe shortage of developable industrial land in the San Gabriel Valley," he says. "The commercial real estate recession started to take hold in late 2007 and industrial space demand dropped significantly. Despite this drop in absorption, industrial vacancies remained low throughout the downturn because supply was so constrained."
Furniss says over past year, he as seen a recovery starting, with considerable increase in demand and industrial vacancies at less than 3% in the San Gabriel Valley.
"Land cannot be created so we have returned quickly to a supply/demand imbalance," he says. "The demise of Redevelopment Agencies in California last year has further tightened the industrial land supply."
At the end of 2012, the San Gabriel Valley led the Greater Los Angeles industrial market, one of the strongest in the United States, in positive net absorption with 551,000 sq-ft, according to CBRE’s Greater Los Angeles Industrial MarketView.
Scheduled for completion by the end of the year, the building will feature 26,000 sq-ft of office space, 32-ft clear heights, ESFR sprinkler system, 2 percent skylights, 41 dock positions and an all-concrete private yard with large truck court.
This is the largest building built in the San Gabriel Valley since 2010 when Seventh Street constructed a 655,000-sq-ft manufacturing facility for Huy Fong Foods in nearby Irwindale, CA.
Built on the former site of the General Dynamics Plant, which closed in 1996. Mission 71 Business Park has brought an economic revitalization to the western side of Pomona. At build-out, it is estimated that the area will benefit from the creation of more than 1,260 direct jobs plus an additional approximately 350 construction jobs.
Private development of the former government-owned General Dynamics plant is also projected to create recurring annual revenues of $2.2 million per year to the city, county and schools, and one-time revenues and private infrastructure investment of $9.1million.
Mission 71’s third phase will also include buildings of 42,000; 51,000; and 114,000 sq-ft, and will be located along 1,500 lineal-ft of freeway frontage on the east side the 71 Freeway, just north of Mission Boulevard.
The buildings will be offered for sale or lease.
Lynn Knox, CBRE vice president and a member of the listing team for Mission 71, said is a recent press release that no new construction in the past three years has created a significant lack of product in the 40,000-plus sq-ft range, making the San Gabriel Valley industrial market one of the tightest markets in the entire LA regioin.
“In today’s current low interest rate environment and with SBA financing easier to obtain, these types of building are in high demand,” she said in the release.