PGIM Lands 111 KSF Tenant in LA’s South Bay

220 W. Victoria St. Photo courtesy of Cushman & Wakefield

A distribution facility in Los Angeles’ tight South Bay market has been fully leased. Local trucking company Pacific Expressway agreed to expand its presence in Compton, in a building owned by PGIM Real Estate.

Cushman & Wakefield Executive Directors Rusty Smith and Steve Bohannon worked on behalf of the owner, while Lee & Associates Principal Craig Poropat and Associate Joseph Stanko represented the tenant in lease negotiations.

Pacific Expressway agreed to occupy the entire 111,000-square-foot warehouse at 220 W. Victoria St., marking a major expansion of its existing space. According to CommercialEdge, Pacific Expressway is headquartered at 18726 S. Laurel Park Road, where it leases just over 9,000 square feet.

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The company agreed on a 7-year lease term for the new space, Cushman & Wakefield confirmed to Commercial Property Executive. The freestanding building features dock and grade loading, 24-foot clear heights, as well as a 14,600-square-foot office component. Its location within the South Bay submarket facilitates access to several major thoroughfares (Interstates 710, 405, 110) and logistics hubs.

According to CommercialEdge, PGIM acquired the building in 2006 in a portfolio transaction from Bristol Group. The company has more recently been active in Southern markets—such as landing the first tenant at a Florida cold storage speculative property developed in partnership with Bridge Industrial—or lending $85 million for a 10-million-square-foot Sun Belt portfolio.

In a prepared statement, Cushman & Wakefield’s Rusty Smith noted that the deal is representative of the submarket’s robust demand for space—its proximity and access to the airport and port areas being the key factor. Average in-place rents for industrial space across metro Los Angeles grew by 5.7 percent year-over-year, to $10.33 as of January, CommercialEdge data shows. Rent growth was among the fastest in the nation and 170 basis points above the national rate of 4 percent.

Los Angeles’ South Bay is among the tightest industrial submarkets in Southern California, with vacancy currently around 1 percent, according to CommercialEdge data. The ports of Long Beach and Los Angeles continue to see record levels of activity heading into the new year, and developable land is quickly being transformed into more industrial space in the region. Also in the South Bay, CT Realty and Clarion Partners recently broke ground on a 145,840-square-foot logistics center, in Carson, Calif., some 5 miles to the west of Pacific Expressway’s newly leased space.