Watson Land Co. will break ground Wednesday on three buildings totaling more than 450,000 square feet at the company's Dominguez Technology Center in Carson. It is one of the relatively few large industrial developments underway in a Los Angeles County market where demand for industrial space is at historic highs.
The buildings are the first of 3.3 million square feet of new construction at the business center by Watson and will represent an investment of more than $160 million when the project is completed in the next six to eight years, according to Richard M. Cannon, president and chief executive of Carson-based Watson. The three buildings, scheduled to be ready by January, are designed for use as industrial, office or technology space, Cannon said.
The most pressing demand in the South Bay and in many other real estate markets in the county, however, is for industrial space, according to observers.
"This is a perfect time to build industrial space," said real estate broker Pete Toughill, manager of Lee & Associates' South Bay office. "Our vacancy rate here in the South Bay is about 4%."
Toughill said businesses looking for spaces of 100,000 square feet or more have "only a handful of choices" in the South Bay and must often look elsewhere--either in other parts of the county or in competing markets where more industrial space is being built.
In all of Los Angeles County, about 7.5 million square feet of new industrial space was under construction at midyear, according to a survey by Grubb & Ellis Co., compared with 13.6 million square feet under construction in the Inland Empire and 2.9 million square feet in Orange County.
According to Toughill, the space squeeze is pushing industrial rates steadily toward 50 cents per square foot per month--a level that hasn't been seen since the peak of the last real estate cycle.
Cannon said the 438-acre Dominguez Technology Center is the largest master-planned business center in Los Angeles County and one of the largest in Southern California.
It is part of the original land grant of 75,000 acres given by the king of Spain more than 200 years ago to Juan Jose Dominguez.