Covington Group Buys SoCal Industrial Site for $110M
Starwood Property Trust provided $84M in financing
By Greg Cornfield December 22, 2021 4:45 pm
reprints
Dallas-based Covington Group has tapped into the historically tight industrial market in Los Angeles County.
The privately held firm acquired the nearly 1 million-square-foot Saugus Station Industrial Center in Santa Clarita. CBRE (CBRE) announced the acquisition, and said Covington Group bought the property with an “institutional capital partner,” but did not disclose the name or the sales price.
Property records show the 24-building complex, along with a 24-acre fully horizontally improved land site, sold for $109.7 million. Additionally, Starwood (STWD) Property Trust provided $84.3 million in financing. A subsidiary of New Jersey-based TMC Properties sold the 69.5-acre center at 25530-25765 Springbrook Avenue, north of the San Fernando Valley.
Entertainment or entertainment-servicing tenants make up about 70 percent of the roster at Saugus Station. Other users include companies in the assembly, light manufacturing, moving and storage, and transportation sectors.
“We feel this property provides an opportunity to create a ‘best-in-class’ entertainment-focused location that will almost be one of a kind in what we are able to offer tenants,” said Ken Sheer, CEO and founding partner of Covington.
CBRE’s Craise Peters, who brokered the deal for both sides along with colleague Doug Sonderegger, said Saugus Station Industrial Center has maintained near full occupancy for the past decade, including during the height of the pandemic.
“The property is well-known in the entertainment industry with many major service providers housing support operations here,” Peters said.
Santa Clarita is the third-largest city in L.A. County, and has produced a few of the largest industrial sales and leases in Southern California this year. Oxford Properties Group put down $133.5 million for the 14-building complex in Santa Clarita, and a major beverage manufacturer tripled its space near two Amazon facilities.
Santa Clarita includes about 2.7 million square feet of industrial space, almost all of which is leased, giving the city a vacancy rate of 0.5 percent according to CBRE’s third-quarter industrial report. The larger Santa Clarita Valley includes 22.7 million square feet of industrial space, which is also historically tight with a 0.4 percent vacancy rate.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
