Los Angeles slipped from seventh to 10th place on Marcus & Millichap’s… (Irfan Khan, Los Angeles…)
A former plastic manufacturing plant in Torrance was purchased by real estate investment firm Hagar Pacific Properties, which expects to see the 28-acre site converted to an upscale industrial and office park in the years ahead.
The plant at 19500 Mariner Ave. was built by Union Carbide Corp. in 1956 to manufacture polyethylene, a common plastic used for shampoo bottles, packaging, children's toys and many other products. Antifreeze, made from ethylene glycol, was also produced and canned there.
Over the years, the once-remote South Bay neighborhood filled in around the plant, said Rob Neal, managing partner of Hagar Pacific. The property near Hawthorne and Del Amo boulevards now has neighbors such as shopping centers and modern warehouses that separate the plant from blocks of single-family homes.
"The community grew up around it," Neal said.
Encino-based Hagar Pacific bought the property from Dow Chemical Co., which took over Union Carbide in 2001. Terms of the sale were not released, but real estate broker Chuck Littell of Colliers International estimated its value at $25 million to $27 million based on Torrance land prices.
"The size and location of the property bode very well for its future development," Littell said.
The property is 60% leased to former Dow subsidiaries that make latex and industrial gases. Dow is cleaning up environmental contamination on part of the site, Neal said.
Hagar plans to immediately lease about 45,000 square feet of metal buildings to tenants that may store automobiles or other goods passing through the ports of Los Angeles and Long Beach. Other improvements are to take place in the future.
"We look forward to repositioning this property in incremental stages throughout the next decade," Neal said.
Party rental firm moving to Inglewood
Classic Party Rentals — one of country's largest suppliers of tents, chairs and china for events — has agreed to move its headquarters and an order-fulfillment center to Inglewood.
The party rental business will relocate its Culver City fulfillment center to 901 Hillcrest Blvd. in Inglewood by June, real estate brokerage Klabin Co. said. The headquarters will be moved from West Los Angeles next year.
Terms of the 10-year lease for 96,000 square feet were not disclosed, but rents for warehouses near Los Angeles International Airport average 83 cents a square foot per month, according to brokerage Cushman & Wakefield.
More than 200 people will work at the new site, which includes 15,000 square feet of offices, said broker Douglas R. Marshall of Klabin Co.
Classic Party Rentals is a regular supplier for Hollywood galas, celebrity weddings and charity events, Marshall said. The company also has a fulfillment center in El Segundo.
Demand for office space forecast to rise
Office landlords can expect to see gradual improvement in tenant demand for space this year, but employers will continue to be cautious about expanding, a real estate brokerage said.
The office sector will be bolstered by the improving economy, which should drive more purchases of buildings by investors, Marcus & Millichap reported.
Based on its research, the brokerage expects office-using employers to create about 720,000 jobs in the U.S in 2012, a 30% increase over last year. That hiring will absorb empty office space, but not as much as it might have in previous recoveries.
"Despite rapidly improving profits, American firms will remain cautious," said Hessam Nadji, managing director of research. Many companies still rent empty space they need to grow into before taking additional space, and others are fitting more workers into smaller quarters.
Los Angeles slipped from seventh to 10th place on Marcus & Millichap's annual office index as Southern California office-using employment gains lagged those of other markets. San Francisco, New York and Houston, respectively, ranked at the top.