Atlas Capital has acquired a 5.4-acre site in the South Bay submarket of Los Angeles as an industrial redevelopment opportunity. Harbor Gateway LLC sold the property, currently comprising 94,113 square feet of office space, for $39.8 million. Newmark represented both parties in the transaction.
Completed in 1978, the property encompasses 12 office buildings with 2,936-square-foot floorplates and 373 parking spaces. Current tenants include Knox Deli, Share Speech and Language, Serenity Recuperative Care and Innerpoint, among others, CommercialEdge data shows.
According to Kevin Shannon, Newmark co-head of U.S. Capital Markets, the site’s industrial zoning and proximity to major freeways, give the buyer an excellent opportunity to convert an older office property into a Class A industrial asset in the desirable Torrance submarket, once the short-term leases expire.
Located at 19401 S. Vermont Ave., the property is less than a mile away from Interstate 110, Interstate 405 and the San Diego Freeway, connecting it to major seaports and LAX. Several retail venues, including Walmart, are within a mile of the property as well.
Shannon, as well as Senior Managing Director Scott Schumacher and Executive Managing Director Ken White, represented the seller, alongside Executive Managing Directors Bret Hardy, Jim Linn and Andrew Briner, Vice Chairman John McMillan and Managing Director Danny Williams.
Industrial redevelopments in suburban LA
Office to industrial conversions represent a feasible strategy in supply-constrained submarkets, due to the record-high demand for warehouse space. Newmark data shows that 49 conversion projects have been started nationwide since 2018, with 2.1 million square feet of office space converted just in Los Angeles between 2018 and 2021.
Last year, Duke Realty Corp. paid $35.4 million for a 105,000-square-foot office building, with plans to redevelop the asset into a logistics property. A similar project is underway in Simi Valley, Calif., where Stream Realty and QuadReal Property Group are converting a 275,000-square-foot office building into Tapo Canyon Commerce Center, a five-building industrial complex.