Foot Locker’s footprint is growing in Southern California.
The footwear and athletic clothing retailer signed the largest industrial pre-lease of the year so far when it committed to about 361,000 square feet of space at El Monte Logistics Center in the San Gabriel Valley of Los Angeles County, according to Newmark (NMRK)’s third-quarter market report. Ares Management (ARES) is building the space, which is expected to be delivered in early 2024.
SEE ALSO: Design Studio Staged To Sell Home Leases 24K SF at Industry City
Property records show Ares Management and Black Creek Group acquired the land for the development for $46.1 million in August 2019. Ares Management did not return a request for comment. JLL (JLL) is leasing the property, but its brokers managing the property declined to comment.
The distribution facility is rising on 15.3 acres at 3900 Arden Drive in El Monte, Calif., about 33 miles from the ports of L.A and Long Beach.
Such a large pre-lease is more a throwback to the runaway years of 2020 through 2022. According to Newmark’s quarterly report, the fervent demand for industrial space that came from “anomalously high consumer spending” in recent years “is no more,” as most occupiers focus on cutting costs. Class A asking rents are also cooling after unprecedented growth.
“Demand for modern-gen space remains high, but many tenants will wait for elevated rents to soften first before committing to space,” the report read. “Vacancy will continue to rise as tenants shed unneeded space.”
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
