Prologis Pays $50M for L.A. Industrial Site With Redevelopment Plans
By Greg Cornfield January 9, 2024 3:30 pm
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Prologis (PLD), the nation’s biggest real estate investment trust, has acquired another industrial asset in Los Angeles County along with the plans for its redevelopment.
The San Francisco-based company acquired a roughly 240,000-square-foot property in Commerce, Calif., from The Gehr Group for $50 million, according to Savills’ fourth-quarter 2023 report released Tuesday. It was the third-largest deal in terms of total sale price in L.A. County in the quarter, after Rexford’s $120 million acquisition of the Pabst Brewing warehouse and Harbor Associates’ $55 million deal in Gardena.
The City of Commerce in October 2023 approved plans to redevelop and expand the property at 7400 East Slauson Avenue by about 50,000 square feet, according to a notice of determination.
The acquisition was made via Duke Realty, which Prologis acquired for $26 billion in 2022. Duke Realty had also been financing the property prior to the sale, records show. It’s unclear how the transaction is related to the financing, as neither Prologis nor Gehr returned requests for comment. Duke provided a $38 million loan in April 2022 following a $33 million loan from January 2021.
The market in the industrial-dominated City of Commerce has softened over the past year. The Commerce, Vernon and Mid-Counties submarkets saw 783,400 net square feet added to the market due to move-outs in the final quarter of 2023, per Savills. The average rent is $1.44 per square foot per month, slightly below the county average, while the vacancy rate is 5.7 percent, which is above the 4.5 percent mark for L.A. County.
Prologis’ acquisition in the City of Commerce at $208 per square foot is also below the county average of $315 per square foot through the first 11 months of 2023, according to CommercialEdge.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
