Amazon-Leased LA Warehouse Sells for $128M

400 National. Image courtesy of Newmark

A family office investment company acquired a delivery facility in Simi Valley, Calif., for $128 million. Greenlaw Partners sold 400 National less than a year after it was converted from an office property.

Newmark Executive Managing Directors Bret Hardy, Jim Linn, Andrew Briner and Ken White, together with Co-Head of U.S. Capital Markets Kevin Shannon, negotiated the transaction on behalf of the seller.

READ ALSO: Industrial Keeps Trajectory

Last year, Greenlaw Partners acquired the 290,220-square-foot office building—formerly occupied by Bank of America—and converted it to industrial use. According to CommercialEdge, Amazon occupies the entire building.

The last-mile facility sits on a 43.6-acre lot, at 400 National Way, adjacent to State Route 116. The seller invested approximately $17 million to redevelop the property, according to the company website. Originally constructed in 1984 as an office structure, the building renovation included modifications to fit Amazon’s needs, including six dock-high and seven grade-level loading doors, with van staging areas.

The tenant also invested capital to add further improvements and accommodate more workers. In August, ConstructionReview reported that Amazon intends to add roughly 300 jobs to the Simi Valley facility.

Industrial continues its strong trajectory

Last-mile warehouses are trading at a premium in markets like Los Angeles, where land constraints, coupled with the current supply chain crisis, are raising the value of such properties. In a prepared statement, Shannon said that the sale is further evidence of significant cap rate compression for net leased space, a compression aided by an attractive debt market for industrial properties.

Amazon’s last-mile warehouse traded at roughly $441.3 per square foot, more than double the average recorded in year-to-date industrial sales through September—$210.7 per square foot—in metro Los Angeles, CommercialEdge data shows.

In September, industrial vacancy in Los Angeles reached 3.0 percent, one of the lowest in the country. The national average was 5.7 percent, while the neighboring Inland Empire market continued to have the lowest industrial vacancy, at 1.1 percent in September, according to the same data provider.