Voit Acquires Industrial Sites for $125 Million
Voit Development Co. last week acquired a 2-million-square-foot portfolio of industrial properties from Fujita Corp. USA for $125 million, President Robert D. Voit of the Woodland Hills-based company said Monday.
The portfolio includes eight business parks in Los Angeles and Orange counties totaling 800,000 square feet and 23 free-standing industrial buildings in Orange County totaling 1.2 million square feet, Voit said.
Voit said the buildings, primarily in the Mid-Cities areas of Los Angeles County and central Orange County, range from 5,000 to 150,000 square feet and are nearly 100% occupied.
Voit’s purchase of the Fujita properties and San Francisco-based Bristol Group’s acquisition last week of a $190-million portfolio of Southern California industrial centers underscore the strong demand for industrial space in the region and investor optimism that demand will remain strong, real estate observers said.
“We continue to feel very good about the industrial market in Southern California because there is not much land left to build new product, and we expect that rents will continue to rise for at least another couple of years,” said J.R. Wetzel, chief operating officer of Newport Beach-based Pacific Gulf Properties Inc., a real estate investment trust.
Pacific Gulf, whose acquisitions included a $76-million industrial portfolio last year, believes so strongly in the industrial market that it started divesting its apartment holdings several years ago to focus on industrial properties. The company owns about 15 million square feet of industrial buildings in California and Arizona, 9.1 million of it in Southern California, Wetzel said.
Voit’s acquisition of the Fujita portfolio, financed by Wells Fargo Bank, was a direct deal that did not involve brokers, Voit said. He said last week’s acquisition was the latest of $400 million in property sales and purchases Voit has completed this year.
Most of the buildings in the Fujita portfolio were built in the 1970s, are being used as warehouse and light industrial assembly space, and “are mostly in areas where you wouldn’t expect to see a lot of new space in the future,” Voit said. He added that his company sees significant potential for rents to continue rising in those areas.
Demand for industrial space is driven by markets investors like Voit and owner-users seeking space for themselves, explained Jim Center, an industrial broker with Grubb & Ellis, who said demand has been strong for several years in both categories.
Despite the closing of the two big deals last week and a few other notable transactions, Center said, “the velocity of deals has slowed because most of the owners prefer to hold. There seem to be fewer portfolios available, and what’s being sold now is being sold at a premium.”
Of the 858 million square feet of industrial space in Los Angeles County and the 177 million square feet in Orange County, only 4.1% is available for lease in Los Angeles County and 7.3% in Orange County today, according to the latest figures from Grubb & Ellis.
Voit said his company’s acquisition of the Fujita portfolio increases his company’s holdings to 5 million square feet of industrial, office and retail space valued at an estimated $400 million. The company’s properties include a small amount of raw land for development, Voit added.
Voit once owned 225 acres of what is now the 7-million-square-foot Warner Center in Woodland Hills, where the company developed 3 million square feet of space from 1974 to 1994.
Voit last year sold the last of his Warner Center holdings, a pair of small retail centers, he said. However, Voit Development has been named developer of a Warner Center site called LNR Warner Center, a 1.2-million-square-foot office complex to be owned by Irvine-based Lennar Partners, a subsidiary of Miami-based LNR Property Corp.
Voit recently completed development of the Plant, an industrial and retail center at the site of the former General Motors assembly plant in Van Nuys and Superstition Springs, an 80-acre office park in Mesa, Ariz.
