AMB Property Buys Warehouse Portfolio
San Francisco-based industrial real estate giant AMB Property Corp. has acquired another portfolio of warehouses in the heart of Los Angeles County’s Mid-Cities industrial district.
The publicly traded real estate investment trust bought an industrial park along the border of Bell and Commerce. It features eight buildings totaling nearly 850,000 square feet of floor space.
AMB declined to disclose what it paid for the business park it acquired from an investment fund managed by Boston advisor AEW Capital Management. But recent similar deals--including a larger portfolio AMB bought from AEW early this year--suggest the price probably approached $50 million.
The property AMB dubbed Ford Distribution Center covers 48.7 acres at the intersection of Eastern and Slauson avenues. It includes some service-center facilities and a truck terminal mixed in with warehouses. The property is about 95% occupied, with larger tenants including Roadway Express, Unisource, Gourmet Award Foods and Los Angeles County.
Darla Longo, Barbara Emmons and John Privett of CB Richard Ellis, along with Trammell Crow Co.’s Eric Hinkelman and Rob Antrobius, brokered the deal. AMB early this year paid an AEW-managed fund an estimated $100 million for a nearby portfolio of mostly industrial buildings totaling just under 1.63 million square feet.
The massive Mid-Cities industrial real estate market remains generally healthy despite a predictable softening in tenant demand this year and additional construction, according to a recent report from brokerage Colliers Seeley. Rents and property values have remained flat after several years of strong appreciation, as slower tenant activity has pushed overall vacancies in the 225-million-square-foot market up to 7.5%.
Institutional-sized real estate investors tend to focus more on centrally located apartment and industrial properties as declining economic conditions create uncertainty.
Those are considered more stable and less risky than office, retail and hotel properties.
Shares of AMB Property were down 11 cents at $25.39 in New York Stock Exchange trading.
