When the last few aircraft factories close, we will have witnessed the complete deindustrialization of major plants in Los Angeles. Big steel, auto, tires, and glass are all gone. In their place are retail centers, big box distribution, a smattering of public buildings, and new urbanist housing.
Continue reading “Post Industrial Land Use”
Gardena is on the brink of insolvency because of a failed insurance investment and poor governing. While desperate to right itself, Gardena’s effort points to a generation of bad decisions. As we enter a period of scarce State and Federal resources, cities like Gardena will be even more dependent on their own management abilities.
The value proposition is overwhelming when comparing old, obsolete structures to developing say, a 3-story residential condominium. We often see redevelopment returns of 2 and 3 times compared to what is currently being generated at an older property. All industrial property with a decent location is open to reuse. A growing population, increased densification and worsening traffic mean there is continual opportunity in underutilized property.
Continue reading “Underutilized Sites”
Like its harbors, airports and freeways, the Los Angeles industrial market is becoming clogged. Buildings are scarce and sale pricing is unimaginably high. Land values and constructions costs make it expensive to build new. Meanwhile Seller’s options are limited by capital gains (although relatively low for the moment), lack of suitable replacement properties, and unwieldy ownership structures.
Continue reading “Overcoming Space Scarcity”
The 1 million square foot air freight development in Hawthorne is being delayed, in part, by a threatened lawsuit from neighboring city of Gardena. Interestingly, the city of Hawthorne voted to exclude this one major development from its own moratorium of anti-trucking development.
Continue reading “Politics Of Trucking”
More and more, there is an element of global manufacturing that I call “shelled out” production. There are no signs on the building. There is no one in the office. The workers either pretend or truly can not speak English. The manufacturing is composed of sub-assembly and contract piece work. There is no one in charge and the workers don’t know where their goods will go. As soon as the customer changes its allegiance to a slightly lower cost provider, the entire operation can fold. Our manufacturing system is largely devolving to the manufactured part and who can make it the best and ship it the fastest. There is virtually no other measure.
Continue reading “Global Manufacturing And Los Angeles”
View Los Angeles Industrial Features in a larger map
Industrial property is not going away, but it’s changing. Overall, only the best located properties or those that are adjacent to existing residential will be conversion candidates. Those industrial buildings safely tucked away in M-zoned districts will be protected. Whether there will be productive businesses for the older buildings is another question. The price difference between low-clear industrial and modern distribution space continues to widen.
We have a $3 million dollar project near the 200-acre Goodyear Tract located at Slauson Avenue and Avalon Boulevard.It is one of the older manufacturing centers in Los Angeles. Pricing is roughly 30% lower than other properties along the 110 Corridor. Obsolescence and neighborhood factors are the biggest reasons that you can find rents in the mid-$.20’s and sale prices in the mid-$30’s.There are a lot of lessons here that can apply to other parts of Los Angeles where manufacturing is either disappearing or adapting.
South Bay continues the same pattern over the past 2 years. Buildings for sale are in demand and buildings for lease languish. There is considerable interest for smaller buildings and developers have taken this cue. New small building projects are under construction with asking prices in the $110 to $135 per square foot range depending on location.
Continue reading “South Bay Pricing Trends”