FEATURE ARTICLE, MAY 2007

INDUSTRIAL DEVELOPMENT
Major projects in Southern California, Arizona speak to the major industrial development opportunities in the West.
Brian A. Lee

Century Business Center

Century Business Center

With the February groundbreaking of the 18-building Century Business Center in Hawthorne, California, Los Angeles-based Kearny Real Estate Co. is looking out for the small industrial owner/user. Tenants can select from units ranging from 5,000 to 21,000 square feet.

“This small, for-sale industrial product, which has individual fenced yards, is not available in Los Angeles County due to the lack of land,” says Hoonie Kang, partner at Kearny Real Estate. “Similar buildings in West Los Angeles would sell for more than twice as much.”

Located on the northwest corner of Crenshaw Boulevard and Jack Northrop Avenue, the 204,000-square-foot Century Business Center is slated for completion at the end of the year. Kang, who reports that the South Bay industrial submarket has less than 3 percent vacancy, lists the security of the master-planned business park, its location close to the Los Angeles International Airport, and its immediate access to the 105 and 405 freeways among Century Business Center’s major advantages.

Kearny bought an 86-acre manufacturing property with 27 buildings for $61 million and  is currently redeveloping it as the Century Business Center. No stranger to that L.A. submarket, the company also controls the non-runway portion of the adjacent Hawthorne Airport, which includes 150,000 square feet of existing buildings and hangars, through an 80-acre ground lease with the City for Hawthorne.

Riverside Industrial Center

Riverside Industrial Center

At more than 1.2 million square feet, Riverside Industrial Center II & III in Phoenix constitute the largest industrial spec building in Arizona. Located at 4750 and 4950 W. Mohave St. in Phoenix, Phases II and III of Riverside Industrial Center break ground this quarter and are scheduled to be completed in fourth quarter of this year.

“The scale and flexibility of the project is unique to the Phoenix market and gives its users a divisibility and expansion capability,” says Jaime Nordham of Grubb & Ellis|BRE Commercial.

From a cost perspective, Riverside Industrial Center is not only favorable compared to Southern California, but also to other Phoenix-are properties not located within the Riverside Tax District, which provides businesses a cost savings of approximately $0.25 to $0.50 per square foot per year in property tax savings versus comparable city districts, according to Nordham. The project is also pending a Foreign Trade Zone (FTZ) designation, which allows a business to defer or eliminate duty on imported goods prior to actually entering the country.

“Site-specific FTZs, called subzones, can be created for qualified businesses that wish to locate anywhere within the city,” says Nordham. “The business virtually becomes a point of entry to the United States.”

Riverside Industrial Center’s advantages don’t end there. Besides being located in the lowest-taxed district in the Phoenix market, the development is just a 5-hour drive from the ports of Long Beach and Los Angeles. The location also offers convenient access to Interstate 10 and the proposed Loop 202 freeway.

K.T. Riverside LLC, a joint venture between KTR Capital Partners and Tratt Properties, is developing Riverside Industrial Center II/III. Deutsch Associates is the project architect and Renaissance Companies is the contractor.

Buckeye Logistics Center

Buckeye Logistics Center

The Alter Group is not into timid business moves. The expanding company expanded into the high-growth Phoenix market in a big way with the Buckeye Logistics Center, located at Buckeye Road and 67th Avenue in the southwest part of the city.

The Chicago-area-based company’s initial industrial development in Phoenix is a 162-acre park capable of supporting more than 3 million square feet of distribution space.

Groundbreaking for a 604,500-square-foot speculative building took place in the fall of 2006 with completion set for next month.

“The Buckeye Logistics Center is one of the few high-velocity, bulk-distribution parks in the southwest Phoenix market with adequate land to support a building up to 980,000 square feet,” says Tom Silva, vice president of marketing for The Alter Group. “The buildings will be state-of-the-art from the standpoint that they will have 32-foot clear-height ceilings and an abundant amount of trailer storage, which is important to today’s corporate distribution companies.”

Buckeye Logistics Center is strategically located minutes from Interstate 10, via two full interchanges at 67th and 75th avenues.
Southern California Logistics Centre

The Southern California Logistics Centre (SCLC) is an industrial force whether by air, ground or rail. Located in Victorville, California at the former George Air Force Base, the 2,500-acre commercial and industrial complex is entitled for 65 million square feet of diverse development, including large-scale distribution and multi-tenant facilities. In March, Stirling Capital Investments broke ground on the $350 million, 6.5 million-square-foot first phase.

“Stirling and the City of Victorville have teamed up to redevelop the former George Air Force Base into Global Access, the largest fully-integrated commercial development in the region, which is anticipated to bring more than 30,000 jobs to the area upon final build out,” says Dougall Agan, principal of Stirling and master developer of SCLC.

Global Access, the 8,500-acre multimodal freight transportation encompasses three development divisions — the logistics airport, the logistics centre and the rail complex. The first phase of industrial development is anticipated to take 30 months to complete, says Agan. Construction on the first Phase I facility, the 407,612-square-foot build-to-suit distribution building for Atlanta-based Newell Rubbermaid, commenced at the beginning of April.


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