South Bay Project Lures $100 Mil-Plus Buyer

SAN PEDRO, CA-An affiliate of a Boston-based pension-fund adviser has agreed to pay about $100 million for the sprawling Port Los Angeles Distribution Center, casting aside fears about the region’s slowing economy and simultaneously providing a boost to a South Bay market that’s trying to rebound from a sluggish third quarter.

Half of the two million-sf industrial park is nearly complete. The buyer is an affiliate of State Street Research, which makes most of its real estate-related purchases through its SSR Realty Advisors unit. The purchase was made on behalf of one of SSR’s institutional clients.

The seller is Gardena-based Overton Moore Properties. Overton Moore began developing the warehouse and distribution facility, some of which stands on the former site of an oil-storage facility, a few years ago with LA-based Pacific Coast Capital Partners.

The project’s 547,000-sf first phase was completed last year and leased to Performance Team Freight Systems, a Southland-based transportation and logistics firm. The second phase is expected to be finished within a few months, with later phases bringing the project’s total sf to nearly two million sf.

The purchase provides another boost to LA’s South Bay submarket, which is showing signs of recovering from a sluggish third quarter. Last week, GlobeSt.com reported Funai Corp.–the world’s largest manufacturer of VCRs–signed a five-year, $2.5-million lease for 75,200 sf inside the nearby ProLogis Park Torrance business complex.

Though the dollar value of the Funai Corp. lease is relatively small, brokers say it’s important because ProLogis, like many other owners of South Bay property, has been struggling to find new tenants as the area’s economy slowed. Some analysts consider the South Bay submarket a barometer of the Greater LA Basin’s economic health because its diversified tenant base ranges from high-tech companies and professional-services firms to manufacturers and import-export interests.