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11/17/15
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Cambro Manufacturing Inc has agreed to an early lease extension of its 318k sf of space in the City of Industry, in a transaction worth $11.8 mil. The deal extends the lease term 64 months beyond the natural lease expiration in April 2017 and it also provides an option for Cambro to expand into an additional 215k sf in an adjacent building in 2017.
Situated on nearly 15 acres at 21558 Ferrero Pkwy, north of the 60 Fwy and west of the 57 Fwy, Cambro Manufacturing has been a tenant for many years, using the facility for distributing finished goods that are manufactured at the company’s Huntington Beach facility. Cambro manufactures a wide variety of products and offers services including table service and display items, storage, shelving, merchandising and insulated product transport for companies within the foodservice industry.
Senior Managing Directors Wesley Hunnicutt and Matthew Moore from NGKF’s Newport Beach office represented Cambro Manufacturing, a Huntington Beach-based company with facilities worldwide. The landlord, Prudential-Grand Avenue Venture LLC, was repped by Marc Selznick of Unire Real Estate.
The new lease included a significant allowance from the landlord to make facility improvements including LED lighting upgrades and office space modifications that required immediate installation per Cambro’s needs. The extension was finalized 18 months in advance of the scheduled lease expiration.
Moore noted, “Our goal for Cambro Manufacturing was realized as we were able to insulate the client from a rising rental rate environment while securing a favorable economic package. The reality is that industrial real estate costs are significantly increasing and vacancy for quality product is less than 2 percent. If we had held off addressing our client’s continued tenancy in the building until late 2016, the costs could have easily increased by 10 to 15 percent in comparison to what we were able to achieve.”
The greater Los Angeles industrial market vacancy is at a historic low. Facilities that compare to the quality and size of Cambro’s existing space are seeing vacancies below one and a half percent.
“We anticipate rents will continue to increase seven to eight percent in this market over the next 12 months,” commented Hunnicutt. “Concessions are beginning to diminish and landlords are becoming increasingly bullish. Tenants who are evaluating future lease expirations require strategic thinking not only for how they negotiate, but also how early they begin implementing the process.”
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