november 11-24, 2014 section b

Real EstateQuarterly

The high rise apartment building, The Current, is under construction at 707E. Ocean Blvd. in Downtown Long Beach. The project by AndersonPacific isthe first phase of a mixed use development called Shoreline Gateway. Seedevelopment update on Pages 8-9 on the status of other local projects.(Photograph by the Business Journal’s Thomas McConville)

ALSO INSIDE• Updates On Residential, Office, Industrial And Retail Real Estate• Revisions Proposed For City’s Mills Act Program• Universal Technical Institute Breaks Ground On Long Beach Campus• Leases And Transactions

Real EstateQuarterly

1_LBBJ_NOV_11_SectionB_LBBJ MASTER LAYOUT 11/8/14 2:25 PM

REAL ESTATE QUARTERLY2-B Long Beach Business Journal November 11-24, 2014

� By SAMANTHA MEHLINGER

Senior Writer

H istorically low interest rates continueto drive demand across all sectors ofthe local and regional real estate mar-

ket with the exception of the office sector,which continues its struggle to recoverfrom the Great Recession.

Bolstered by an ever-increasing rentalpopulation and a lack of inventory, themulti-family market continues to experi-ence high demand from investors seekingto take advantage of low interest rates,currently hovering at about 4.5 percent,according to local real estate agents andregional economists. Developers are alsoriding the wave of high demand for rentalunits, with more than 1,200 new units

planned or underway throughoutDowntown Long Beach.

Demand for rental units has been strongsince the recession, when many peoplelost their homes or did not gain the finan-cial footing to enter the single-familyhousing market, Robert Kleinhenz, chiefeconomist for the Los Angeles EconomicDevelopment Corporation (LAEDC), toldthe Business Journal.

Johanna Cunningham, executive direc-tor of the Apartment Association,California Southern Cities, said some eco-nomic forecasters have estimated therental population in Southern Californiamight reach as much as every 60 out of100 people over the next decade.

That growing demand, coupled withwhat Kleinhenz referred to as an “under-

built” market, continues to drive up rentalrents and decrease vacancy rates.

In the Greater L.A. region, rents haveincreased between 6 to 8 percent year overyear from 2013 to 2014, according to GaryPainter, director of research for Universityof Southern California’s (USC) LuskCenter for Real Estate. USC’s 2014 CasdenMulti-family Forecast noted the averageannual rent in L.A. County has increasedsteadily for four years in a row.

In contrast to the high demand amongCalifornia residents for multi-familyhousing, the single-family market is see-ing a slowdown in sales activity. As ofSeptember, the single-family market hadexperienced a decline in the number ofsales transactions for 14 straight months.In the Los Angeles metropolitan area,

overall sales decreased by 2.2 percentfrom September 2013 to the same monththis year.

William Yu, an economist for UCLA’sAnderson Forecast, said the steadilyincreasing price of homes in the region hasmade it difficult for low- to middle-incomeresidents to afford single-family homes.

Kleinhenz pointed out that decliningsales might be spurred by a lack of first-time homebuyers participating in themarket. Nationally, “the share of first-time buyers fell to its lowest point innearly three decades and is preventing ahealthier housing market from reachingits full potential,” according to an earlyNovember survey from the NationalAssociation of Realtors.

Higher home prices are not entirely to

Foundations for The Current, a 17-story, 223-unit luxury apartment tower at 707 E. Ocean Blvd., are in the process of being laid (also pictured below). The developer, AndersonPacific, LLC, has invested $70million in the project, which is scheduled to be completed in 2016, according to AndersonPacific Executive Vice President Ryan Altoon. Pictured, from left are: Altoon; Jim Anderson, president and CEO ofAndersonPacific; and Jason Silver, development project manager of Ledcor Properties, Inc. (Photographs by the Business Journal’s Thomas McConville)

Low Interest Rates Spur Investment In Local Real Estate Markets,But Office Sector Fails To Keep Up And Single-Family Sales Slow


REAL ESTATE QUARTERLYNovember 11-24, 2014 Long Beach Business Journal 3-B

blame, Kleinhenz emphasized. “We’re stilllooking at tight underwriting standards thatare preventing first-time homebuyers fromgetting loans,” he said. Student loan debtmay be making it more difficult for younghomebuyers to qualify for loans, he noted.

Once loan standards become less strin-gent, which may happen next year, thenumber of sales transactions shouldimprove, Kleinhenz said. Painter specu-lated that, as rents in the multi-familysector increase, demand should increasefor single-family homes. Home pricegains should continue at around 5 percentnext year, he noted.

Among the commercial real estate mar-kets, the industrial sector continues to shineas the peak performer with ever-decreasingvacancy rates and steadily increasing leaserates. According to Kleinhenz, containermovement through the ports of Los Angelesand Long Beach “is closing in on the pre-recession peak . . . which would be around16 million containers [per year].”Increasing goods movement through theports creates an increased need for ware-houses to store those goods for distribution.

In Los Angeles County, industrial leas-ing activity increased by about 1.1 millionsquare feet in the first half of 2014 com-pared with the same period in 2013,according to the LAEDC’s 2015 EconomicForecast & Industry Outlook. A third quar-ter Lee & Associates Industrial MarketReport indicated that vacancy in the SouthBay area, which includes Long Beach,decreased by 1 percent from the second tothird quarter this year, while lease ratesincreased slightly.

Lee & Associates attributed a $15 persquare foot decrease in sales price in thethird quarter to a higher inventory of lower-quality and therefore lower-priced indus-trial buildings on the market.

The demand for higher-quality indus-trial space continues to spur industrial con-struction, particularly at real estate devel-oper Sares-Regis’s Douglas Park, where anearly 59,000 square-foot building isunder construction for Shimadzu AircraftEquipment USA. Across the street at thenortheast corner of Lakewood Boulevardand Cover Street, Mercedes-Benz USA isbuilding out a 1.1 million square-footproperty formerly owned by The BoeingCompany. At the southeast corner of thesame intersection, a new project with threelight industrial buildings topping 100,000square feet each is planned.

Demand for retail space remains stable,if not increasing slightly. A third quarterretail market report from CBRE, Inc. esti-mated vacancy in the South Bay decreasedby about 0.4 percent in the third quarter,while a Marcus & Millichap report esti-mated vacancy remained at about 4 per-cent. Rising rents might be an indicator ofstronger demand, with rates increasing 5.8percent to about $23.26 per square foot,according to Marcus & Millichap.

Demand for retail space is closely tiedto spending power, Kleinhenz pointedout. “Improvement in the general state ofthe economy means more householdshave more purchasing power, and thatshows up in the form of retail spending,”he said. “The outlook for retail spendingin general ought to be good over the nextcouple of years, and that should mean that

for retail space, vacancy rates and leaserates should improve over the next coupleof years,” he said.

Demand for retail among consumersmay be reflected in the recent move byretail management firm DDR Corp. toreposition The Pike as an outlet shoppingcenter. The California Coastal Commissionis reviewing the plans on November 14.

Trailing behind the recovery of otherreal estate markets is the office sector,which has failed to shore up high vacancyrates. Kleinhenz attributed the highvacancy rates, which top 20 percent in theSouth Bay and Long Beach area, to a“mixed bag” of job growth in office-related sectors. While the professional andbusiness services sector increasedemployment by 31,400 positions fromSeptember of 2013 to the same month thisyear, other office-related job sectors havebegun consolidating, according to anOctober report from the CaliforniaEconomic Development Department.

In addition to fluctuating job losses andgains in office-related industries, manycompanies have opted to allot fewer squarefeet per worker in their offices and down-grade to smaller locations when possible,Kleinhenz noted. Yu agreed.

In order to increase demand for officespace and shrink the high vacancy rates, Yusaid Los Angeles must offer more opportu-nities for business development. “We needto figure out how to improve our businessenvironment compared to other areas, likethe Bay Area and Texas,” he said. �



Residential Real Estate� By SAMANTHA MEHLINGER

Senior Writer

Tight Inventory Of Low- To Mid-Priced HomesLeads To Sales Slow Down

Over the past few months, a lack ofsingle-family homes in the low- to

mid-price range – between $200,000 to$700,000 – has led to a slowdown in salestransactions in Long Beach because of aninability to meet first-time homebuyerdemand, according to local real estateagents.

“We have had fewer sales this year thanwe did last year,” Phil Jones, owner ofColdwell Banker Coastal Alliance, toldthe Business Journal. In the 12 monthssince September 2013, the number ofpending sales transactions decreased by 8percent in comparison to the prior 12-month period, while closed salesdecreased by 10.5 percent, Jones said.

“The problem continues to be a lack ofavailable inventory,” Geoff McIntosh,owner of Main Street Realtors, assessed.There are currently about 2.7 months ofinventory of single-family homes for sale in

Grace Thibodeaux, broker associate with Realty One Group’s Beach County Real Estate, specializes in single-family real estate in the 90803 zip code,which encompasses Belmont Shore and Naples Island. This 1,308-square-foot property at 163 Pomona Ave., near 2nd Street, is listed at $775,000.According to Thibodeaux, the 90803 area is generating “a lot of buzz” among people looking to move to Long Beach from outside the city.(Photograph by the Business Journal’s Thomas McConville)

Construction on Urban Village, a 129-unit market rate apartment building at 1081 Long Beach Blvd.,should be complete by the end of the year, according to Stephen Clarke, senior project manager fordeveloper AMCAL Housing. The mixed-use development includes 5,000 square feet for ground floorretail. (Photograph by the Business Journal’s Thomas McConville)



Long Beach, which is well below the histor-ical average of about six months, he noted.

“Normally we would see about 29 per-cent of our transactions being first-timehomebuyers. Because of that lack of starterinventory, we are seeing far fewer first-time buyers enter the market place,”McIntosh said. According to Jones, first-time homebuyers now only make up about18 percent of buyers statewide.

McIntosh attributed the decrease infirst-time homebuyers on the market tovery low inventory in homes pricedbelow $400,000. “The building block,the foundation for the whole real estatemarket, is to be able to get those first-time buyer sales and it is not possibleright now,” he said.

In addition to low inventory, Jones sug-gested potential first-time buyers mightbe avoiding purchasing a home due toeconomic and financial factors. “Eventhough unemployment is dropping andjobs are being created, they are not thejobs of the quality that allow people toafford to buy a home,” he said.

While there was a spike in sales trans-actions in September of about 14 percentover the same month in 2013, the year-long trend is that the number of salestransactions is lower in comparison to lastyear, Jones said.

The median price of single-familydetached homes in Long Beach continuesto increase, although at a slower pacethan last year. “The median price is

$473,000 through the last 12 months,”Jones said. In September, the medianprice of single-family detached homesincreased by about 11 percent from thesame month in 2013, hitting $511,000,according to both McIntosh and Jones. “Itis the first time in my memory since 2008that we have broken the $500,000 mark,”Jones said.

“Median price continues to go up butpart of that is skewed – not because prop-erties are appreciating so rapidly in value,but because of that lack of first-timebuyer inventory [of homes],” McIntoshsaid. “The sales we are seeing are higher-priced sales because the higher end of themarket is moving,” he added.

Grace Thibodeaux, a broker associatewith Realty One Group’s Beach CountyReal Estate, noted that, while overallsales transactions seem to have beenslowing throughout Long Beach, activityhas picked up in zip codes with higher-priced properties, such as the 90803 zipcode encompassing Belmont Shore andNaples Island. While the $500,000 to$700,000 price range of single-familyhomes has seemed to be the most indemand, the number of sales transactionsfor higher-priced homes near the oceanalso seems to have increased steadily thisyear, she observed.

Phyllis Schmidt, a real estate agent whoprimarily works in the Belmont Shorearea, told the Business Journal that some

(Please Continue To Next Page)



sellers are pricing their homes unrealis-tically, perhaps due to overenthusiasmabout steadily increasing prices. Jonesagreed.

“There are more listings expiring,which means sellers are continuing tobe unrealistic about where their pricingis,” Jones said. “They saw such strongappreciation last year they just want tobelieve it will continue. It is just notsustainable,” he added.

Through the balance of the year mov-ing into 2015, Jones said he expectedthe median sales price of single-familyhomes to increase between 5 to 10percent.

Price gains in the Long Beach condomarket were more modest in Septemberin comparison to the detached home mar-ket. “The median price for condos inSeptember was $269,500,” which was a5.5 percent increase from September2013, he said. He attributed the moremoderate price jump to the condo mar-ket’s larger inventory of about 3.5months of supply.

All real estate agents interviewed bythe Business Journal expected the num-ber of sales transactions of single-familyhomes in Long Beach to remain stablethrough the end of the year without anysignificant rate of increase, due to flatbuyer demand during the holidays.

Low Inventory And Marked-Up Prices Slow Long Beach Multi-FamilyMarket Despite High Demand

Low interest rates continue to drivebuyer demand for multi-family

rental properties in Long Beach, but a lackof inventory coupled with inflated pricinghas slowed down sales velocity, accordingto local real estate professionals.

“It is very difficult to cultivate inventoryright now,” Eric Christopher, senior associateat INCO Commercial, said of multi-familyproperties in Long Beach. “It is just a matterof the majority of the people who own theproperties are happy with them. They areperforming well and there is no huge motiva-tion to sell on a large scale,” he explained.

Steve Bogoyevac, vice president of invest-ments at Marcus & Millichap regionaloffice in Downtown Long Beach, said thelow inventory has been reflected in his ownexperience. “I can look at my own inventoryand tell you that my listings have probablyslowed by 15 to 20 percent,” he said.

The lack of inventory, Christopher said,is “pretty frustrating” considering thatdemand among buyers is very high. “I havegot a white board [with a list] of six oreight people who have between $200,000and $1 million that they are ready tospend,” he said. But even when he doesfind potential investment properties for hisclients, the list price is often too marked upfor buyers to consider, he noted.

Bogoyevac observed the same marketcharacteristics. “The sellers are going,‘The market is up, let’s price it up another

Eric Christopher, senior associate with INCO Commercial, recently closed what he called the largestprivate investment sale of a multi-family property in Long Beach this year. The 27-unit building at 26Alamitos Ave., located near Ocean Boulevard, sold for $10,250,000. (Photograph by the BusinessJournal’s Thomas McConville)


Senior Writer

The city’s Mills Act Historical Property ContractProgram is one step closer to getting up and running

again after having been frozen since 2006, now that citystaff has come forward with recommendations for revis-ing the program.

Via the Mills Act program, historic property ownersenter into contracts with the City of Long Beach in whichthe owners commit to restore and maintain their proper-ties in return for tax reductions on the increased value oftheir homes. The savings must be used to fund restorationand maintenance efforts for the properties.

The city froze the program eight years ago so LongBeach Development Services (LBDS) could inspect par-ticipating properties to ensure owners were working onrequired maintenance and restoration. There are 30 sin-gle-family homes and 200 condo units participating in theprogram, according to Amy Bodek, director of LBDS.

“The Mills Act program was frozen for a long timebecause we were really struggling with how to manage the

program and then how to manage the existing contracts thatwe have,” Bodek said. “We now have recommendations onexactly what needs to be included in a [property] work plan,what the contract should say, a general dollar amount of thevalue of the property that we might consider to participatein the program, and then [guidelines for] how to managethe program from this point forward.” These guidelinesshould make the process of applying for the Mills Act pro-gram, and determining who qualifies, simpler.

Inspections on Mills Act properties, conducted toensure property owners were complying with their con-tracts, were previously sporadic, Bodek said. To try to geta better feel for whether or not property owners werecomplying, the city has conducted inspections on as manycontracted properties as possible since 2006.

LBDS staff discovered some homeowners were unawaretheir properties were contracted through the Mills Act pro-gram after purchasing them from previous homeownerswho had entered into the contracts. “Part of it is also mak-ing sure the people who have the contracts understand theirrole and their obligation, particularly if a property changeshands,” Bodek said of new focuses for the program.

“We are really focusing on what the homeowner saysthat they are going to do, what is the time frame they aregoing to do it in, and then doing compliance and makingsure they actually did it,” Bodek explained. Through therevamped program, inspections are going to be conductedon a rotating basis every three to four years.

Part of the reason the program was suspended was todetermine how best to deal with condo buildings in whichnot all unit owners participate in the program, such as at theVilla Riviera on Ocean Boulevard (pictured below at right).“What we are doing in the future is, if there is a multi-fam-ily project or property, all of the owners have to agree toparticipate and the participating entity will be the home-owners association, not the individual property owners,”Bodek said. For existing condo complex contracts, she said,“We are going to try to get the remaining folks under con-tract so that the entire building is under contract.”

LBDS is also proposing allowing historic commercialproperties to participate in the program. The proposedrevisions to the Mills Act program may go to the citycouncil in December, Bodek said. If approved, she hopedthe program will be rebooted next year. �

Revisions Proposed For City’s Mills Act Program

Residential

Real Estate

(Continued From Previous Page)



10 to 20 percent. And the buyers aregoing, ‘Eh, not quite there,’” he said.

Last year and even early into this year,sellers were often marking up propertieswith the correct expectation that marketdemand would rise to meet the higher price.For example, at that time, someone with amulti-family property valued at around $1million would mark up the price to $1.2 mil-lion, Bogoyevac said. The property would siton the market for one to three months, andthen sell at list price. Sellers are still doingthis – but the prices have gotten higher thaninvestors care to pay when considering fac-tors like the cap rate, which is the ratio of theexpected annual net operating income of aproperty to its price, he explained.

Inflated expectations for selling price onthe part of sellers coupled with low inven-tory has slowed the rate of sales transactionsthis year, both Christopher and Bogoyevacobserved. But the slowdown is not indica-tive of a lack of demand. “If you were totake a property to market based on a recentsales comp and price it accordingly, you’regoing to get a lot of offers,” Bogoyevac said.

Christopher estimated prices for multi-family properties in Long Beach have risenbetween 10 to 15 percent this year due tohigh buyer demand and low supply. “Theprices have worked their way back up towhere they were in 2006,” he said. Heexpected prices to continue to rise as longas interest rates remain in the low 4 to 4.5percent range and if landlords are able toincrease lease rates.

In the short term, Bogoyevac expected

sales prices to remain stable through theend of the year, without much appreciation.“I think we are going to see continued flat-ness through the rest of the year in terms ofvalue,” he said. “What typically spikesvalue are interest rates. They are just so lowthat I don’t see them getting lower, andtherefore it is going to be harder to justifyanother push in price,” he explained.

Rental rates in Long Beach decreased inthe first two quarters, according to both aMarcus & Millichap report and the 2014University of Southern California CasdenMulti-Family Forecast. Both reports esti-mated rental rates decreased by about 1.5percent in that time frame. However, theCasden Forecast, released in October, pro-jected rental rates in Long Beach wouldincrease steadily through at least the secondquarter of 2016 from the current average rateof about $1,400 to about $1,550 per month.

“My survey of ownership is that people arestarting to implement rent increases and theyare targeting that 5 to 8 percent range on anannual basis,” Christopher said. “Thevacancy rate is very low . . . [at] 3 or 4 per-cent, maybe. So I don’t see any problem withbringing rents a little higher in 2015,” he said.

Johanna Cunningham, executive directorof the Apartment Association, CaliforniaSouthern Cities, also expected rents toincrease.

“We are starting to see an uptick in howmuch is being charged for rents,” she said.Rental rates should increase at a “slow andsteady” pace to match the pace of eco-nomic recovery in the region, she added. �

PATREECE COBURNCommercial Escrow Officer

INTERNATIONAL CITY ESCROW, INC.An Independent Escrow Corporation.Licensed by the Dept. of Business oversight

5000 E. Spring St. · Suite 120 · Long Beach, Ca 90815

www.icescrow.com

562-497-9777

INTERNATIONAL CITYESCROW, INC.

Specializing In




Senior Writer

H igh demand for multi-family and industrialspace in Long Beach

continues to drive new developmentsthroughout the city, with most apart-ment construction concentrated inDowntown Long Beach and virtuallyall new industrial construction cen-tered around Douglas Park inNortheast Long Beach. The retailsector is also beginning to spur devel-opment activity as DDR Corp., themanagement firm overseeing ThePike at Rainbow Harbor, has solidi-fied plans to turn The Pike into anoutlet shopping center.The Business Journal spoke with

the developers of some of theseprojects, as well as Long BeachDevelopment Services DirectorAmy Bodek in late October, to geta comprehensive grasp on the sta-tus of developments around town.

Outlets At The PikeAbout a year after news of plans to

turn The Pike into an outlet mall sur-faced online through real estatedeveloper EWB Development’s web-site and were later removed, DDRhas submitted plans to the CaliforniaCoastal Commission to turn theshopping center into outlets. Theplans are to be reviewed at the com-mission’s meeting on November 14. “They are going to have all new

signage, all new façade improvements andthen they are doing a brand new two-storybuilding in front of the Hyatt The PikeLong Beach,” Bodek told the BusinessJournal. The 508,550-square-foot buildingis for “commercial retail and entertain-ment” use, according to a CoastalCommission document.Bodek estimated the plans allow for

about 15 to 20 tenants throughout the cen-ter. DDR confirmed it is seeking outletstore tenants, although some are likely tobe traditional retailers, including H&M,she said. In late October, DDR announcedit was consolidating eight retail pads ontwo floors of The Pike to accommodate a24,000-square-foot location for H&M. Oneof those pads was previously occupied byCold Stone Creamery, which is relocatingelsewhere in the center, a statement fromDDR said. H&M is scheduled to open inthe second half of 2015.Other construction underway at The Pike

is for the Restoration Hardware outlet,which opened at the center in 2013. Thestore is expanding upward to take additionalspace on the second floor, Bodek said.State staffers are recommending the

project for approval, according to thecoastal commission report. “I suspect bymid-December it is going to be quite a con-struction zone down there,” Bodek said.

Other DowntownDevelopmentsDemand for rental units continues to

spur a wave of multi-family real estatedevelopments in Downtown Long Beach.

Six apartment and loft complexes are cur-rently under construction between ElmAvenue and Long Beach Boulevard fromeast to west, and from Ocean Boulevard toas far north as 6th Street. Three more havesubmitted plans to the city for develop-ments in the downtown core off PineAvenue and Ocean Boulevard. In total,these developments represent 1,244 newmulti-family units in downtown alone.The biggest multi-family complex now

under construction is The Current, a $70 mil-lion, 17-story, 223-unit tower at 707 E.Ocean Blvd. According to Ryan Altoon,executive vice president with developerAndersonPacific, LLC, workers are cur-rently installing the building’s foundation.Once that is complete, construction on thesubterranean parking structure will begin.“We should start seeing the building sub-structures being built from now into thebeginning on January,” he said. “FromFebruary through August is when you shouldstart seeing the tower.” The luxury apartmentbuilding should be complete by the secondquarter of 2016, Altoon estimated. Demolition of an office building is under-

way to make way for a new 222-unit complexcalled Parc Broadway at 245 W. Broadway,which is being marketed to young profession-als. “There are only two floors left. Half thebuilding is gone,” Michael Bohn, designdirector and principal with design firmStudio One Eleven told the Business Journal.Demolition for the building is a lengthierprocess than for most projects becauseworkers are meticulously removing anyrecyclable materials from the building.

After the building is demolished, thenext step is to relocate an L.A. Countystorm drain beneath the building into thestreet, Bohn said. “We have to work with alot of different jurisdictions [to relocate thedrain],” he said, which makes the processmore complex. He estimated the siteshould be ready for construction of the newmulti-family building by June 2015.Located around the corner from Parc

Broadway is the Pine Square project at 250Pacific Ave., where 69 multi-family unitsare being built beneath an existing elevatedrental complex. Bodek estimated construc-tion should be complete within the nextfew months, by early 2015.Construction to convert a former city

office building at 100 Long Beach Blvd.into 156 multi-family rental units should becomplete by the middle of 2015, accordingto Richard Lewis, principal with JR vanDijs, Inc., the construction managementfirm on the project. Ratkovich Properties isthe developer of the project, called theEdison Lofts. Current construction workincludes replacing the glass door entryway,installing structural steel for penthousesand constructing a rooftop pool, Lewis said.Also nearing completion is AMCAL

Housing’s Urban Village, a 129-unit mar-ket rate apartment building at 1081 LongBeach Blvd. According to Stephen Clarke,senior project manager at AMCALHousing, the building should be completeby the end of the year. No tenants havebeen secured for the 5,000 square feet ofground floor retail space but there areprospective tenants, he said.

In the East Village Arts District, the fram-ing of a 30-unit loft development by UrbanPacific Multi-Housing, LLC at the corner of6th Street and Elm Avenue has been com-pleted. Called the 6th Street Lofts, the proj-ect should be finished in the second quarterof 2015, according to Scott Choppin,founder and CEO of Urban Pacific.Three multi-family projects, two of which

involve adaptively reusing historic officesbuildings, are located within one block ofone another in downtown. Located behindThe Pike, conversion of office space in theOcean Center building at 110 W. OceanBlvd. into 75 multi-family units has beenproposed by owner Levy & Associates, withStudio One Eleven as the project designer.Plans for the building include a mix of lofts,one bedroom and two bedroom apartments,ground floor retail, a fitness center, a dogpark and community room, according toBohn. The Cultural Heritage Commission isscheduled to hear an update on the OceanCenter project on November 10. If the com-mission green-lights the project, designsmay be solidified and the project may go outto bid, Bohn said.Directly beside the Ocean Center build-

ing at 150 E. Ocean Blvd., LennarMultifamily Communities is moving for-ward with plans to build a 216-unit multi-family project, according to Bodek. Theproject was originally proposed before therecession and was put on hold. Becauseplans were approved years ago, the projectis able to go through a lesser level of envi-ronmental review at this point, Bodekexplained. “They are going to submit for

Real Estate Developments Are Planned An

1. Restoration Hardware,which is expanding tothe second floor.2. Site for a new retailbuilding across fromHyatt The Pike LongBeach hotel. 3. H&M Clothing Storeopening in 2015.4. Renovation of 110 W. Ocean Boulevardbuilding into apartments.5. Multi-family complexby Lennar.

1_LBBJ_NOV_11_SectionB_LBBJ MASTER LAYOUT 11/11/14 10:51 AM


their next phase of design review within thenext couple of weeks,” she said, adding thatshe expected the project to go before theLong Beach Planning Commission in June.

Plans to convert office space at the nearbyformer Security Pacific National Bankbuilding at 110 N. Pine Ave. into 118 multi-family units designed by L.A.-based DavidTakacs Architecture have been approved,according to Bodek. “As of now, it is up tothe project applicant to pull their buildingpermits and start construction,” she said.

Another adaptive reuse project is thePsychic Temple, a creative office spacenearing completion at a historic building at244 E. Broadway. The core and shell of thebuilding have been completed, according toLewis of JR van Dijs. The future tenant, acreative advertising agency calledinterTrend Communications, is scheduledto move into the building by the end of theyear, he said.

Douglas Park AreaDouglas Park, the Sares-Regis owned

office and light-industrial business parklocated between Carson Street and theLong Beach Airport off LakewoodBoulevard, continues expanding as morecompanies seek to relocate there.

Nearing completion in the heart of thebusiness park are two medical office build-ings by Urbana Development, of whichRichard Lewis is also a principal. The build-ings, which measure about 38,000 squarefeet and 52,000 square feet, should be com-pleted by the end of the year, Lewis said.Long Beach Gastroenterology, ColumbiaPediatrics Medical Group, Laser Skin Care,an imaging center, a pharmacy and a bloodlaboratory are relocating from other areas ofLong Beach to the new buildings.

Urbana is also under contract to build anew 40,000-square-foot headquartersbuilding for Nautilus International HoldingCorporate, which is relocating fromWilmington. Lewis estimated construction

may begin as early as February, and theproject is scheduled for completion inDecember 2015.

Also under construction at Douglas Parkis a 58,796-square-foot building forShimadzu Aircraft Equipment USA, theaircraft manufacturing division ofShimadzu Precision Instruments. The air-craft manufacturer is relocating its head-quarters to Douglas Park from Torrance.The company hopes to move its staff into

the new location by March 2015, accordingto a Shimadzu representative.

The conversion of a former Boeing air-craft manufacturing facility at the northeastcorner of Lakewood Boulevard and ConantStreet into the Western Region Offices forMercedes-Benz USA is well underwayacross the street from Douglas Park. The1.1 million-square-foot facility is sched-uled for completion in the second quarterof 2015, and will also house a Vehicle

Preparation Center and Learning &Performing offices.

Directly across Conant Street fromMercedes, Sares-Regis plans to build a newPacific Pointe East business park withthree 100,000-square-foot-plus light-indus-trial buildings. “I suspect they will be in aposition to break ground probably in mid-2015,” Bodek said.

Southeast Long BeachThe largest planned retail development

in Long Beach in years is still months awayfrom moving forward. Taki Sun, Inc., theowner of a property at the southwest cornerof 2nd Street and Pacific Coast Highwaycurrently occupied by the existing SeaportMarina Inn, has proposed a new retail cen-ter for the site. Plans for the proposed two-story center include more than a dozenretail pads, a movie theater, offices andparking. A draft environmental impactreport (EIR) is still being prepared for theproject, Bodek said. “We hope to have thatEIR out by early next year for circulation,”she said, adding that most EIRs have abouta 45-day comment period, after whichresponses are prepared by the city. “Itcould take nine months to get to the plan-ning commission,” she said.

Bixby Park AreaAt 2010 E. Ocean Blvd., demolition of

the existing Beach Plaza Hotel, whereCherry Avenue ends, is scheduled to beginin the first quarter of 2015, according toMike Murchison, a representative for prop-erty owner, Silversands Properties USA.The company plans to build a 40-roomhotel and 56 adjacent multi-family units. �

(Photographs by the Business Journal’s Thomas McConville)

ed And Underway Throughout Long Beach

InsideMercedesLong BeachConstruction is under-way for administra-tive offices, a trainingcenter and a vehiclepreparation center atMercedes-Benz USAWestern Regionoffices on LakewoodBoulevard. The firm,which signed a 15-year lease for thetwo-building, one mil-lion-square-foot site,is expected to movein during the secondquarter of 2015.

Parc BroadwayThe Parc Broadway project at 245 W. Broadway is currently going through a phase of deconstruction of the former state office building. The developer isgoing floor by floor removing recycable materials before demolition is completed and construction begins on the 222-unit upscale apartment complex.

rdware, ng to

retail

om ng

Store

ulevard

tments. omplex



Office Space� By BRANDON FERGUSON

Staff Writer

Local Office Market Remains Stable, But The Outlook Is Promising

According to the 3rd quarter marketreport issued by Cushman &

Wakefield’s Long Beach office, vacancyrates for office space in the city remainedstable, as did average asking rental rates.The report indicated that the DowntownLong Beach market ended the July toSeptember quarter with a 20.77 percentvacancy rate, while the remainder of thecity – referred to as the suburban market –fared better at 17.58 percent vacancy.

David Smith, senior vice president atCBRE Inc., put the vacancy rates fordowntown at 22.2 percent and the subur-ban market at 17.1 percent.

While the numbers aren’t particularlythrilling, activity and interest is starting topick up in areas surrounding Long Beach.Smith explained that the office sectors inOrange County, West Los Angeles and ElSegundo have seen increases in activity,which bodes well for the Long Beach area.

“Some of the other markets like LongBeach have dragged behind but are finallystarting to see that uptick in activity thatwe’ve all been hoping for and expecting forquite some time,” Smith said.

Kevin Shannon, who serves as CBREInc.’s vice chairman of institutional proper-ties group, said the outlook is promising.

“The capital market gods are smiling on

us right now. There’s an abundance of liq-uidity in both the debt and equity markets,”Shannon said. “As you get deeper into therecovery, there’s more confidence in it and

the fundamental real estate markets areimproving.”

Toliver Morris, owner of WMCommercial, which manages the Landmark

Becky Blair, left, president of Coldwell Banker Commercial BLAIR WESTMAC, is pictured with Associate Sheva Hosseinzadeh in front of one of the agency’slatest listings located at 150 Long Beach Blvd. Bank of America is not leaving, but the building does have office space for lease – 2,000 to 15,000 squarefeet on its three floors. Blair tells the Business Journal that she’s noticed an increase in the number of startup companies seeking smaller office spaces.(Photograph by the Business Journal’s Thomas McConville)



Square tower, explained that lower prices inthe Long Beach area make downtown anattractive spot for national companies.Meanwhile, recent talk of a new civic cen-ter, an outlet mall at The Pike and more res-idential options is sweetening the pot.

“There’s a lot of exciting stuff coming toDowntown Long Beach. I think [compa-nies] look at ocean view, oceanfront space– we’re one of the cheapest in the nation foroceanfront office space,” Morris said.

Landmark Square is home to CaliforniaResources Corporation, a spinoff ofOccidental Petroleum. Since Occidentalannounced it would be moving its head-quarters to Texas, many have speculated asto where the company spinoff will locateits California headquarters. Morrisdeclined to comment on the company’sfuture; however, Cushman & Wakefield’smarket report indicated that, in the 3rdquarter, California Resources expanded itsLandmark Square office space.

According to Becky Blair, president ofColdwell Banker Commercial BLAIRWESTMAC, smaller businesses are alsogetting into the game.

“We are seeing startups, maybe 2,000to 4,000 square feet, especially from themedical sector and technology compa-nies,” Blair said.

But, she explained, while more tenantsare coming back to downtown, the areapresents challenges, especially when com-pared to the suburban area of Long Beach.

“[Downtown office] is certainly slowerthan industrial and retail but it also seemsto struggle compared to the suburban area

of the airport, which has good freewayaccess and other amenities,” Blair said.

With technology changing the way peo-ple work, changes in the types of officescompanies seek are happening as well.

“People are of course more mobile nowso it’s not necessary for them to sit in theoffice and have a big presence to see clientsin. They travel and are not really tethered bylocation any longer. So much of our work isdone online and over the phone,” Blair said.

Smith explained that younger, tech-ori-ented companies are moving away fromwhat he called 1980s and ’90s-style spaceswith dropped ceilings and lots of privateoffices in favor of more open environments.

“They’re looking for gathering spaceoutside of the building where people caneat, sit, relax and work with Wi-Fi accessand laptops. Not looking to be sitting intheir office looking at the same computerscreen for eight hours a day,” Smith said.

Morris explained landlords are increas-ingly converting existing space into whathe called ‘creative space.’

“It’s typically exposed ceilings, hardfloors, maybe some exposed brick or con-crete elements. They love to have operablewindows if they can, lots of natural lighttypically. That’s kind of the nature of thecreative, which is the antithesis of the dropceiling, cubicle farm, cut-pile carpet, fluo-rescent lighting,” Morris said.

In its market report, Cushman &Wakefield forecasted a generally positiveoutlook for the office sector thanks to anincrease in employment, which is expectedto soon surpass the pre-recession peak.

“The continued growth of the county’soffice-using sectors should fuel additionaldemand for office space,” the report read.

The report also said that, though anincrease in new inventory in the ElSegundo market is expected to create morecompetition for the South Bay, rental ratesare expected to increase as the “South Baymarket continues to see spillover demandfrom the neighboring Westside in the enter-tainment and tech sectors.” �

IndustrialSpace� By BRANDON FERGUSON

Staff Writer

Brokers Cite ‘Red Hot’Activity, IncreasedCompetition Among Buyers,But Uncertain Future Looms

Third quarter real estate figures indi-cate that an already-tight industrial

market recently got a bit tighter. But, evenas supply dwindles, local brokers are keep-ing busy.

“It’s been red hot,” said BrandonCarrillo, a principal with the Long Beachoffice of Lee & Associates. “I think if youtalk to any broker right now, there’s been ahuge surge in activity.”

The Lee & Associates 3rd QuarterMarket Report shows that vacancy rates inthe port area are currently at 2.5 percent,while the vacancy rate for the entire SouthBay is at 3.8 percent – a 10 percent dropfrom the previous quarter. According to thereport, the drop in available product has ledto an increase in lease rates.

“Asking rents increased again in the 3rdquarter to $.64 net from $.61 net the previ-ous quarter, as the supply of availablebuildings diminished over the past threemonths,” the report read.

In the City of Carson, where the WatsonLand Company brokers lease deals, limitedsupply is having a push-pull effect on rates.

“There’s definitely upward pressure onrental rates,” said Lance Ryan, senior vicepresident of marketing and leasing atWatson Land Company. “There’s also beena downward pressure in terms of conces-sions like free rent and tenant improve-ments as a result of that because you havemore customers vying for fewer opportuni-ties in terms of available space.”

Ryan said last month his companysecured a lease agreement with theAtalanta Corporation. The company isconsolidating several different existingfacilities into one 200,000-square-footlocation in the Watson Industrial Center.Though he said he wasn’t able to discussthe terms of the agreement, Ryanexplained the company will use the spaceto warehouse food.

“They’ll be doing a combination ofimport and export of food products. They’ll

(Please Continue To Page 13)



G one are the days when Douglas Park was just a vacant and dusty plot of land. Newbuildings continue to crop up at the light industrial and office business park, with thelatest addition beginning to take shape in recent weeks with rough plumbing

installed and a dirt pad laid for the foundation of a 142,000-square-foot automotive tradeschool. A cement slab is scheduled to be poured in the next week or so.

Construction on the new Universal Technical Institute (UTI) campus began in Octoberat Douglas Park following approval by the Planning Commission in August. Chad Freed,senior vice president of business development and general counsel for UTI, told theBusiness Journal the company is investing between $17 million and $20 million in the newcampus. “It is a very significant capital investment,” he said.

“It a relatively long build time, but we’re up and running,” Freed said of the constructiontimeline. “We think construction will be complete in early- to mid-summer [of 2015]. Wewill be teaching on site in late summer to early fall,” he added. The exterior design of thebuilding is slightly different than others within Douglas Park, but is in keeping with thesame quality, according to a Long Beach Development Services staff report.

Campus plans feature 77,000 square feet of training laboratories, 10,000 square feet ded-icated to manufacturer-specific training programs and 9,000 square feet for classrooms,according to Mallory Jaroski, UTI senior account executive. Student support services,administrative offices and common areas make up the remaining square footage. The cam-pus is expected to accommodate about 800 students and 85 faculty and personnel per day.

While some UTI campuses also include NASCAR and marine technician programs, theLong Beach campus is dedicated to automotive-related diploma programs in professionalautomotive technology, diesel technology and collision repair, according to Freed.Manufacturer-specific advanced training programs for original equipment manufacturers(OEMs) are also going to be offered on campus, Freed said. UTI is working to identifyoriginal equipment manufacturers to partner with on the programs, such as Mercedes-Benzor Honda, he added. Mercedes has the closest proximity to the future UTI campus; thecompany is currently building a facility across the street on the corner of LakewoodBoulevard and Cover Street on a 1.1 million square-foot property formerly used by TheBoeing Company to manufacture aircraft.

Long Beach was selected for UTI’s newest cam-pus following a comprehensive evaluation of areaswith the most potential for growth for the company,Freed said. In addition to being centrally located toareas with high demand for UTI’s services, includ-ing Northern Orange County and Southern LosAngeles County, Long Beach is in close proximityto many relevant job opportunities for future stu-dents, he added.

One of the key reasons Long Beach was chosenwas the demand from original equipment manufac-turers, Freed said. “Why [we decided] this is anarea that is desirable for UTI has a lot to do withlistening to the OEMs, and them telling us wherethey want us to be,” he said.

“There is a strong fleet presence within thesouthern L.A. market and there are also a lot ofdealerships, especially what I would consider pre-mium-branded dealerships,” Freed added. “Thosetend to have strong pay, good benefits, paid vaca-tion and those types of things, so those are goodplaces for our students to end up.” About four outof five UTI students are hired after completingtheir diplomas, Freed said. “We have a whole teamof people dedicated to helping students get jobs.”

In spring 2015, UTI plans to conduct local hir-ing to fill the 85 staff and personnel positions atthe Long Beach campus, according to Freed. “Wewill be looking for people who are experiencedtechnicians in particular to be instructors, so wewill have a large number of instructors who arevery specific in their skillset,” he said. “We will behiring people in advance of opening to go througha training program. Some of the people that wehire will be experienced instructors and some ofthem might be very experienced technicians whohave less experience from an instructor perspec-tive,” he explained.

The Phoenix-based UTI has 11 campuses focus-ing on transportation technical education in eightstates, including California, Florida, Texas, NorthCarolina, Illinois, Pennsylvania, Massachusettsand Arizona. The company, founded in 1965 as asmall automotive training facility. �

Automotive Trade SchoolBreaks Ground At DouglasPark; Company RevealsDiploma Focuses And

Campus Plans� By SAMANTHA MEHLINGER

Senior Writer



have both dry goods and freezer/coolerproducts as well,” Ryan said.

In Northeast Long Beach, on the sprawl-ing 100-acre property formerly owned byThe Boeing Company and now known asDouglas Park, several buildings are cur-rently under construction. In September,the Business Journal reported that the LongBeach Planning Commission green-lighteda trade school operated by the Scottsdale-based Universal Technical Institute. Thebuilding, which will be located north ofConant Street between Worsham and BayerAvenues to provide space for 800 studentsand 85 faculty, will train automotive tech-nicians. According to a press release issuedlast week by Sares Regis Group (SRG),which is overseeing construction of thebuildings at Douglas Park, UTI agreed to a15-year lease for the 136,965 square-footbuilding. The built-to-suit lease agreementis valued by SRG at more than $30 million.

“UTI joins other prominent companiesplanning for growth that see Douglas Parkas a chance to claim a piece of the SouthBay’s last tract of prime commercial land,”SRG’s Senior Vice President ofCommercial Development LarryLukanish said in a statement.

Along with UTI, other companies settingup shop at Douglas Park include ShimadzuAircraft Equipment USA, which is relocat-ing its headquarters from Torrance to a53,000-square-foot building, and terminal

operator Metro Ports, which is moving itsheadquarters from Wilmington to a 40,000-square-foot building. Both buildings areexpected to be completed by 2015 and addto the growing number of corporate head-quarters in Long Beach.

Like Carson, Long Beach, and other areasof the South Bay, Signal Hill also continuesto experience low vacancy rates when itcomes to industrial properties. According toPatrick O’Healy, owner of O’HealyCommercial Real Estate Services, vacancyrates in the city are lower than 2 percent.

“The biggest problem we have is the lackof product,” he said. But O’Healy wasquick to add that low supply doesn’t trans-late to less work. In recent weeks, latenights at the office have become morecommon, and he said he’s been swampedwith calls from interested parties aboutproperties from Signal Hill to Carson.

“Activity is very strong. I have a smallbuilding listed for sale in Carson, and I havefive offers on the table,” O’Healy said.

He’s currently in negotiations on threeother properties, two of which are locatedin Long Beach.

“I think there’s just a full spectrum ofbuyers that we’re seeing that want to buyproperty. Two of the transactions I’mnegotiating are with developers. I haven’tdone a deal with a developer in fiveyears,” O’Healy said.

When asked what he thought was behindthe sudden surge of activity, O’Healy gavean increasingly common response.

(Please Continue To Next Page)

(Continued From Page 11)

Industrial Space



“I believe there’s been a tremendouspent-up demand for properties that’s prob-ably been there certainly over a year,”O’Healy said. “I think the marketplace hasreally solidified a lot for businesses tofinally say, ‘Okay, I’m going to bite thebullet and take on more overhead.’”

But, though activity in the industrialmarket may be bustling at the moment,O’Healy cautioned that many companiesacross the country don’t have confidence ineither the current administration or otherpoliticians when it comes to fostering abusiness-friendly environment. He referredto a recent speech made by Hilary Clintonat a Boston political rally in which shestated that corporations don’t create jobs.

“It doesn’t breed a high level of confi-dence,” O’Healy said.

For Carrillo, uncertainty surrounding theongoing negotiations between longshore-men and port merchants, as well as portcongestion stemming from questions overchassis management, is having rippleeffects on the industrial market. Heexplained that recent discussions that hewas having with logistics companies inter-ested in occupying warehouse space nearthe port fell apart.

“It’s just one of those things where noone knew what was going on and you haveships anchoring offshore trying to figureout what’s the slowdown. It’s just bad forbusiness,” Carrillo said.

Also of growing concern, Carrillo said, isuncertainty over the future of interest ratesin the wake of the Fed’s recent decision toend its bond-buying program. While somebrokers have expressed confidence to theBusiness Journal that interest rates willremain low, Carrillo isn’t quite as con-

vinced. He said he wonders whether thecurrent surge in activity is an indication thatpeople are taking advantage of low interestrates while there’s still time. He furtherexplained that he’s seen businesses buyingproperty and simultaneously borrowingadditional money to purchase equipment.

“It’s been a big guessing game whereinterest rates are going,” Carrillo said. “Theywant to bundle that loan. Better to do it nowrather than later, when everyone’s guessinginterest rates [will] start going up.” �

Retail Space� By BRANDON FERGUSON

Staff Writer

Retail Space Experts Describe Strong Market, Reduction In Vacancy Rates

Local brokers are describing a healthyretail real estate market spurred on

by low interest rates. “It’s a low interest rate environment and

there’s quite a bit of liquidity out in themarket and the banks have a very strongwillingness to lend,” said AdamFriedlander, a broker in the Long Beachoffice of Marcus & Millichap. “Buyers atthe table are able to obtain very attractiveloans and put good debt in place at lowinterest rates, and that essentially is what’skeeping these cap rates compressed.”

Friedlander explained that active ten-ants in the market include Circle K, 7-11and Dunkin’ Donuts. He recently closed asale on a McDonald’s located in Torranceon Crenshaw Boulevard. The sales pricetotaled $3,300,000 with a 3.45 percentcap rate. Marcus & Millichap also closed

escrow last quarter on a Long BeachWalgreens located at 2627 Pacific Ave.The property sold for $6,450,000 with a4.5 percent cap rate.

“Properties that are well located, offergood visibility and [are] in dense infilllocations with strong traffic counts, thoseproperties are going to have a low vacancyrate,” Friedlander said.

Doug Shea, president of INCOCommercial, told the Business Journalthat, in Long Beach, hot retail propertiescontinue to be located in Belmont Shore.

“Belmont Shore by far probably out-paces any other region by, I’d say, by 40percent, easily,” he said. “If you think aboutit, where else do you want to be? The foottraffic is amazing down there.”

Like Friedlander, Shea sees continuedgrowth in the near term. But as availablespace becomes less abundant, lease rateswill increase. He points to one of INCO’srecent listings, the former Roe Restaurant& Fish Market located at 5374 E. 2nd St.According to Shea, it’s listed at close to $5per square foot per month. Shea saidshrinking vacancy rates will likely have aneffect on future investment as well.Currently, he said, investors can expect a 10percent return on their investment.

“Probably for 2015 we’re only going tosee about a six percent return because ofdemand. With demand you’ve got higherprices. With higher prices you’ve got lessreturn,” he said.

Shea added that he expects interest ratesto remain low despite the Fed’s recentannouncement that it would be ending itsquantitative easing program.

“Even though the Fed has stopped buyingbonds, they’ve still promised to keep inter-est rates low. So that should help the realestate market for quite some time,” he said.

According to a market report for thegreater Los Angeles area issued by CBRE,third quarter vacancy rates for retail spacesin the South Bay, which includes LongBeach, have dropped to 3.2 percent – downfrom 3.6 percent in the previous quarter.CBRE Senior Associate MitchellHernandez explained that he sees the retailreal estate industry as strong, adding thathe sees an approaching “inflection point,” aterm used in calculus to describe a changein a curve. The change he said, is due to theexpanding use of social media in advertis-ing, which can have wide-ranging benefitsfor brick and mortar retailers.

“Maybe they have a strong social mediacampaign and they pull in other customersoff Belmont Shore and Bixby Knolls oranywhere else throughout the region,”Hernandez said. “This inflection point isreally an opportunity to drive and penetrateretail brands.”

He added that brick and mortar stores arehere to stay despite ongoing competitionfrom online resources.

“Experience is best experienced in per-son, not online, not on a phone. Brick andmortar is the gateway to all of that,” he said.

Last quarter CBRE successfully secured alease agreement with Starbucks, whichopened a new location across the streetfrom the Governor George DeukmejianCourthouse in Downtown Long Beach.Though Hernandez declined to offer thespecific terms of the agreement, he saidStarbucks decided on a larger buildingthan usual.

“At that location they took a larger foot-print than they needed,” he said. “Justanother testament to how strong they feltabout it. With the courthouse being there,they were really thrilled and they’re evenconsidering extended hours, [selling] beerand wine. There are a lot of things they’relooking at that they otherwise don’t con-sider at other locations.”

Hernandez also said a new tenant willsoon occupy the former Loehmann’s spacelocated in the Marina Pacifica at PacificCoast Highway and East 2nd Street.Though he declined to say who the tenantis or how much they paid to occupy thespace, he said the retailer is expected tomove in by fall of 2015.

“It’s a retail use that’s going to be com-plementary to the merchandising mix ofthe shopping center,” he said.

In Northeast Long Beach, Jim Ault is pres-ident of JAMCO Equities Inc., which man-ages the Parkview Village Shops. He recentlytold the Business Journal that the shoppingcenter, which totals 112,119 square feet, cur-rently only has 1,957 square feet available.

“With respect to our center, ParkviewVillage, we actually are at the highestoccupancy rate for retail we’ve ever beenat. We have exactly one retail space avail-able,” Ault said.

He said he’s also seen upticks in businessin other areas where he manages proper-ties, including Corona and Santa Monica.When asked what he thinks is driving theincreased investment in retail, Ault said hethinks people have grown tired of waiting.

“There’ve been a lot of people just sit-ting on the sidelines waiting to see whatthe economy is going to do,” Ault said. “Ithink at some point people finally real-ized, ‘Hey, I can do this, and it’s time todo something.’” �

1. Douglas Park Medical Office Campus consists of two buildings with a combined 90,000 square feet and have been sold to doctor groups. Thelarger building is available for lease. Completion is expected during first quarter 2015.

2. Nautilus International Holding Corporation and its Metro suite of companies is relocating its headquarters to Long Beach after being inWilmington for 91 years. The 40,000-square-foot building is expected to be completed by the end of 2015 and will house approximately 80 employees.

3. Universal Technical Institute, an automotive training school based in Arizona, has broke ground on a 142,000-square-foot campus. See story Page 12.

4. Shimadzu Aircraft Equipment USA is relocated its headquarters from Torrance. The 58,796-square-foot building is under construction.(September 2014 photograph by the Business Journal’s Thomas McConville)

Industrial Space(Continued From Page 13)



Leases AndTransactions

Jupiter Holdings, which owns the 11-story, 292,540-square-foot office buildingknown as Topaz at 222 W. 6th St. inDowntown San Pedro, reported the follow-ing transaction:

• Regus, the world’s largest provider offlexible workplaces with more than 1,500business centers, has signed a lease tooccupy 15,000 square feet on the fourthfloor of Topaz. Phil Brodkin, regionaldirector of Regus, said, “Having been inthe market to find that ideal location toserve our South Bay customers, the dis-covery of Topaz here in San Pedro was acomplete eye opener.” Topaz, whichopened earlier this year, is 30 percentleased as of October.Inco Company announced the following

transactions:• An 8,590-square-foot industrial prop-

erty at 5531-5529 Cherry Ave. in NorthLong Beach was sold for $1,150,000.Inco’s Brad Miles handled the transaction.

• A 4,064-square-foot industrial propertyat the northwest corner of Olive Avenueand 27th Street was sold for $1,550,000.Miles handled the transaction.

• Howard Service Group signed a four-year lease for 9,108 square feet of indus-trial space at 2755 Seaboard Lane in NorthLong Beach. Inco’s Paul Phillips handledthe transaction.

• Inco also announced the followingtransactions outside the local market:Limo4Me leased 1,530 square feet ofoffice space at Peter’s Landing inHuntington Beach, with Doug Shea han-dling the lease; Athlete’s Nutrition leased1,500 square feet of retail space inOceanside, with Inco’s David Baker han-dling the transaction; and Baker also han-dled an 1,830-square-foot lease for indus-trial space in Laguna Hills.

• Long Beach Advanced Orthopedicssigned a five-year lease for 3,445 squarefeet of office space at 1760 Termino Ave.,Suite 208 in Long Beach. Inco’s Shea andMiles handled the transaction.

• Art Hermosillo signed a three-yearlease for 1,600 square feet of industrialspace at 1884 Freeman Ave. in Signal Hill.Inco’s Shea and Peter Pappageorge handledthe transaction.

• Brascia Builders signed a five-yearlease for 2,847 square feet of industrialspace at 2801 E. Anaheim St. in LongBeach. Shea handled the transaction.

• Keith Attardo leased 14,040 square feetof office space for five years at 4132Katella Ave., Suite 104, in Los Alamitos.Inco’s Shea and Shannon Allen handled thetransaction.Lee & Associates announced the follow-

ing transactions:• TFC Manufacturing purchased a

57,600-square-foot industrial building at4001 Watson Plaza Dr. in Lakewood for$7,604,000. The building was sold by RenaBiotechnology. Lee’s Brandon Carrillohandled the sale.

• Vu Company LLC purchased a 9,100-square-foot retail building at 750 LongBeach Blvd. for $975,000. The buildingwas sold by DiRosa Investments LLC.Lee’s Noel Aguirre and Sean Lieppmanhandled the transaction.

• Long Beach Urgent Care signed a five-year lease for 2,195 square feet of retailspace at 6555 E. Pacific Coast Hwy. in TheMarketplace. Lee’s Aguirre and Lieppmanhandled the transaction.

• Integrated Health Management leased

865 square feet of office space at 249 E.Ocean Blvd. Lee’s Shaun McCullough andJeff Coburn represented the landlord andQuint Carroll from Cushman & Wakefieldrepresented the tenant.

• A 5,080-square-foot office building at4120-4122 Atlantic Ave. in Bixby Knollswas sold by $750,000. Lee’s McCulloughand Coburn handled the transaction.

• Lee & Associates also announced thefollowing transactions outside the localmarket: BHK Property LLC purchased a5,000-square-foot industrial building inGardena for $595,000. Lee’s Mark Brunnerand Keller Williams’ Rene Garcia handledthe transaction; Major Logistics leased a15,916 square feet of industrial space inGardena. Carrillo and Massaro handled thetransaction; Alaska Baja Pacific leased5,920 square feet of industrial space forthree years in Norwalk. Carrillo handledthe lease for Lee; and Freightsaver.com,LLC leased 3,305 square feet of officespace in Huntington Beach, with Lee’sCoburn, McCullough and StephenTakahashi handling the transaction.O’Healy Commercial announced the

following transactions:• SunRise Plumbing signed a three-year

lease for 15,694 square feet of industrialspace – including office, warehouse andyard – at 5259 Cherry Ave. in LongBeach. SunRise is a plumbing contractor.Patrick O’Healy, SIOR, represented theowner, Louis Tilley, while Lee &Associates’ Garrett Massaro and Carillorepresented SunRise.Coldwell Banker Commercial BLAIR

WESTMAC announced the followingtransactions:

• Rose Park Roasters, LLC, signed afive-year lease for 2,327 square feet ofretail space at 795 Long Beach Blvd.Becky Blair and Sheva Hosseinzadeh han-dled the transaction. �

(Call 562/988-1222 for a pdf of the formto complete to be listed in this section.)

Brandon Carrillo, a principal with Lee & Associates specializes in selling and leasing industrial property.He’s shown here in front of a 57,000-square-foot building located at 4001 Watson Plaza Dr. inLakewood. Carrillo brokered the sale of the building to TFC Manufacturing Inc. for $7.6 million. Thecompany specializes in fabrication and serves the military, aerospace and commercial industries. Thebuilding’s former owner, Rena Biotech, was represented by CBRE Inc. (Photograph by the BusinessJournal’s Thomas McConville)


november 11-24, 2014 section b

Documents

regional real estate

singlefamily market

wave of high demand

retail real estate revisions

experience high demand

rates continueto drive

singlefamily homes

singlefamilyhousing