November 11-24, 2014 Section B

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Real Estate Quarterly

The high rise apartment building, The Current, is under construction at 707 E. Ocean Blvd. in Downtown Long Beach. The project by AndersonPacific is the first phase of a mixed use development called Shoreline Gateway. See development 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

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REAL ESTATE QUARTERLY 2-B Long Beach Business Journal

November 11-24, 2014

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 $70 million 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 of AndersonPacific; 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 ■ By SAMANTHA MEHLINGER Senior Writer istorically low interest rates continue to drive demand across all sectors of the local and regional real estate market with the exception of the office sector, which continues its struggle to recover from the Great Recession.

Bolstered by an ever-increasing rental population and a lack of inventory, the multi-family market continues to experience high demand from investors seeking to take advantage of low interest rates, currently hovering at about 4.5 percent, according to local real estate agents and regional economists. Developers are also riding the wave of high demand for rental units, with more than 1,200 new units

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planned or underway throughout Downtown Long Beach.

Demand for rental units has been strong since the recession, when many people lost their homes or did not gain the financial footing to enter the single-family housing market, Robert Kleinhenz, chief economist for the Los Angeles Economic Development Corporation (LAEDC), told the Business Journal.

Johanna Cunningham, executive director of the Apartment Association, California Southern Cities, said some economic forecasters have estimated the rental population in Southern California might reach as much as every 60 out of 100 people over the next decade.

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

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

In the Greater L.A. region, rents have increased between 6 to 8 percent year over year from 2013 to 2014, according to Gary Painter, director of research for University of Southern California’s (USC) Lusk Center for Real Estate. USC’s 2014 Casden Multi-family Forecast noted the average annual rent in L.A. County has increased steadily for four years in a row.

In contrast to the high demand among California residents for multi-family housing, the single-family market is seeing a slowdown in sales activity. As of September, the single-family market had experienced a decline in the number of sales transactions for 14 straight months.

In the Los Angeles metropolitan area,

overall sales decreased by 2.2 percent from September 2013 to the same month this year.

William Yu, an economist for UCLA’s Anderson Forecast, said the steadily increasing price of homes in the region has made it difficult for low- to middle-income residents to afford single-family homes.

Kleinhenz pointed out that declining sales might be spurred by a lack of firsttime homebuyers participating in the market. Nationally, “the share of firsttime buyers fell to its lowest point in nearly three decades and is preventing a healthier housing market from reaching its full potential,” according to an early November survey from the National Association of Realtors.

Higher home prices are not entirely to

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REAL ESTATE QUARTERLY November 11-24, 2014 blame, Kleinhenz emphasized. “We’re still looking at tight underwriting standards that are preventing first-time homebuyers from getting loans,” he said. Student loan debt may be making it more difficult for young homebuyers to qualify for loans, he noted.

Once loan standards become less stringent, which may happen next year, the number of sales transactions should improve, Kleinhenz said. Painter speculated that, as rents in the multi-family sector increase, demand should increase for single-family homes. Home price gains should continue at around 5 percent next year, he noted.

Among the commercial real estate markets, the industrial sector continues to shine as the peak performer with ever-decreasing vacancy rates and steadily increasing lease rates. According to Kleinhenz, container movement through the ports of Los Angeles and Long Beach “is closing in on the prerecession peak . . . which would be around 16 million containers [per year].”

Increasing goods movement through the ports creates an increased need for warehouses to store those goods for distribution.

In Los Angeles County, industrial leasing activity increased by about 1.1 million square feet in the first half of 2014 compared with the same period in 2013, according to the LAEDC’s 2015 Economic Forecast & Industry Outlook. A third quarter Lee & Associates Industrial Market Report indicated that vacancy in the South Bay area, which includes Long Beach, decreased by 1 percent from the second to third quarter this year, while lease rates increased slightly.

Lee & Associates attributed a $15 per square foot decrease in sales price in the third quarter to a higher inventory of lowerquality and therefore lower-priced industrial buildings on the market.

The demand for higher-quality industrial space continues to spur industrial construction, particularly at real estate developer Sares-Regis’s Douglas Park, where a nearly 59,000 square-foot building is under construction for Shimadzu Aircraft Equipment USA. Across the street at the northeast corner of Lakewood Boulevard and Cover Street, Mercedes-Benz USA is building out a 1.1 million square-foot property formerly owned by The Boeing Company. At the southeast corner of the same intersection, a new project with three light industrial buildings topping 100,000 square feet each is planned.

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

Demand for retail space is closely tied to spending power, Kleinhenz pointed out. “Improvement in the general state of the economy means more households have more purchasing power, and that shows up in the form of retail spending,” he said. “The outlook for retail spending in general ought to be good over the next couple of years, and that should mean that

Long Beach Business Journal 3-B for retail space, vacancy rates and lease rates should improve over the next couple of years,” he said.

Demand for retail among consumers may be reflected in the recent move by retail management firm DDR Corp. to reposition The Pike as an outlet shopping center. The California Coastal Commission is reviewing the plans on November 14.

Trailing behind the recovery of other real estate markets is the office sector, which has failed to shore up high vacancy rates. Kleinhenz attributed the high vacancy rates, which top 20 percent in the South Bay and Long Beach area, to a “mixed bag” of job growth in officerelated sectors. While the professional and business services sector increased employment by 31,400 positions from September of 2013 to the same month this year, other office-related job sectors have begun consolidating, according to an October report from the California Economic Development Department.

In addition to fluctuating job losses and gains in office-related industries, many companies have opted to allot fewer square feet per worker in their offices and downgrade to smaller locations when possible, Kleinhenz noted. Yu agreed.

In order to increase demand for office space and shrink the high vacancy rates, Yu said Los Angeles must offer more opportunities for business development. “We need to figure out how to improve our business environment compared to other areas, like the Bay Area and Texas,” he said. ■

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REAL ESTATE QUARTERLY 4-B Long Beach Business Journal

November 11-24, 2014

Residential Real Estate ■ By SAMANTHA MEHLINGER Senior Writer

Tight Inventory Of Low- To Mid-Priced Homes Leads To Sales Slow Down

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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)

ver the past few months, a lack of single-family homes in the low- to mid-price range – between $200,000 to $700,000 – has led to a slowdown in sales transactions in Long Beach because of an inability to meet first-time homebuyer demand, according to local real estate agents.

“We have had fewer sales this year than we did last year,” Phil Jones, owner of Coldwell Banker Coastal Alliance, told the Business Journal. In the 12 months since September 2013, the number of pending sales transactions decreased by 8 percent in comparison to the prior 12month period, while closed sales decreased by 10.5 percent, Jones said.

“The problem continues to be a lack of available inventory,” Geoff McIntosh, owner of Main Street Realtors, assessed.

There are currently about 2.7 months of inventory of single-family homes for sale in

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 for developer AMCAL Housing. The mixed-use development includes 5,000 square feet for ground floor retail. (Photograph by the Business Journal’s Thomas McConville)

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REAL ESTATE QUARTERLY November 11-24, 2014 Long Beach, which is well below the historical average of about six months, he noted.

“Normally we would see about 29 percent of our transactions being first-time homebuyers. Because of that lack of starter inventory, we are seeing far fewer firsttime buyers enter the market place,” McIntosh said. According to Jones, firsttime homebuyers now only make up about 18 percent of buyers statewide.

McIntosh attributed the decrease in first-time homebuyers on the market to very low inventory in homes priced below $400,000. “The building block, the foundation for the whole real estate market, is to be able to get those firsttime buyer sales and it is not possible right now,” he said.

In addition to low inventory, Jones suggested potential first-time buyers might be avoiding purchasing a home due to economic and financial factors. “Even though unemployment is dropping and jobs are being created, they are not the jobs of the quality that allow people to afford to buy a home,” he said.

While there was a spike in sales transactions in September of about 14 percent over the same month in 2013, the yearlong trend is that the number of sales transactions is lower in comparison to last year, Jones said.

The median price of single-family detached homes in Long Beach continues to increase, although at a slower pace than last year. “The median price is

Long Beach Business Journal 5-B $473,000 through the last 12 months,” Jones said. In September, the median price of single-family detached homes increased by about 11 percent from the same month in 2013, hitting $511,000, according to both McIntosh and Jones. “It is the first time in my memory since 2008 that we have broken the $500,000 mark,” Jones said.

“Median price continues to go up but part of that is skewed – not because properties are appreciating so rapidly in value, but because of that lack of first-time buyer inventory [of homes],” McIntosh said. “The sales we are seeing are higherpriced sales because the higher end of the market is moving,” he added.

Grace Thibodeaux, a broker associate with Realty One Group’s Beach County Real Estate, noted that, while overall sales transactions seem to have been slowing throughout Long Beach, activity has picked up in zip codes with higherpriced properties, such as the 90803 zip code encompassing Belmont Shore and Naples Island. While the $500,000 to $700,000 price range of single-family homes has seemed to be the most in demand, the number of sales transactions for higher-priced homes near the ocean also seems to have increased steadily this year, she observed.

Phyllis Schmidt, a real estate agent who primarily works in the Belmont Shore area, told the Business Journal that some (Please Continue To Next Page)

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REAL ESTATE QUARTERLY 6-B Long Beach Business Journal

November 11-24, 2014

Residential Real Estate

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

(Continued From Previous Page)

sellers are pricing their homes unrealistically, perhaps due to overenthusiasm about steadily increasing prices. Jones agreed.

“There are more listings expiring, which means sellers are continuing to be unrealistic about where their pricing is,” Jones said. “They saw such strong appreciation last year they just want to believe it will continue. It is just not sustainable,” he added.

Through the balance of the year moving into 2015, Jones said he expected the median sales price of single-family homes to increase between 5 to 10 percent.

Price gains in the Long Beach condo market were more modest in September in comparison to the detached home market. “The median price for condos in September was $269,500,” which was a 5.5 percent increase from September 2013, he said. He attributed the more moderate price jump to the condo market’s larger inventory of about 3.5 months of supply.

All real estate agents interviewed by the Business Journal expected the number of sales transactions of single-family homes in Long Beach to remain stable through the end of the year without any significant rate of increase, due to flat buyer demand during the holidays.

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

ow interest rates continue to drive buyer demand for multi-family rental properties in Long Beach, but a lack of inventory coupled with inflated pricing has slowed down sales velocity, according to local real estate professionals.

“It is very difficult to cultivate inventory right now,” Eric Christopher, senior associate at INCO Commercial, said of multi-family properties in Long Beach. “It is just a matter of the majority of the people who own the properties are happy with them. They are performing well and there is no huge motivation to sell on a large scale,” he explained.

Steve Bogoyevac, vice president of investments at Marcus & Millichap regional office in Downtown Long Beach, said the low inventory has been reflected in his own experience. “I can look at my own inventory and tell you that my listings have probably slowed by 15 to 20 percent,” he said.

The lack of inventory, Christopher said, is “pretty frustrating” considering that demand among buyers is very high. “I have got a white board [with a list] of six or eight people who have between $200,000 and $1 million that they are ready to spend,” he said. But even when he does find potential investment properties for his clients, the list price is often too marked up for buyers to consider, he noted.

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

Revisions Proposed For City’s Mills Act Program ■ By SAMANTHA MEHLINGER Senior Writer he city’s Mills Act Historical Property Contract T Program is one step closer to getting up and running again after having been frozen since 2006, now that city staff has come forward with recommendations for revising the program.

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

The city froze the program eight years ago so Long Beach Development Services (LBDS) could inspect participating properties to ensure owners were working on required maintenance and restoration. There are 30 single-family homes and 200 condo units participating in the program, according to Amy Bodek, director of LBDS. “The Mills Act program was frozen for a long time because we were really struggling with how to manage the

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

Inspections on Mills Act properties, conducted to ensure property owners were complying with their contracts, were previously sporadic, Bodek said. To try to get a better feel for whether or not property owners were complying, the city has conducted inspections on as many contracted properties as possible since 2006.

LBDS staff discovered some homeowners were unaware their properties were contracted through the Mills Act program after purchasing them from previous homeowners who had entered into the contracts. “Part of it is also making sure the people who have the contracts understand their role and their obligation, particularly if a property changes hands,” Bodek said of new focuses for the program.

“We are really focusing on what the homeowner says that they are going to do, what is the time frame they are going to do it in, and then doing compliance and making sure they actually did it,” Bodek explained. Through the revamped program, inspections are going to be conducted on a rotating basis every three to four years.

Part of the reason the program was suspended was to determine how best to deal with condo buildings in which not all unit owners participate in the program, such as at the Villa Riviera on Ocean Boulevard (pictured below at right).

“What we are doing in the future is, if there is a multi-family project or property, all of the owners have to agree to participate and the participating entity will be the homeowners 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 contract so that the entire building is under contract.”

LBDS is also proposing allowing historic commercial properties to participate in the program. The proposed revisions to the Mills Act program may go to the city council in December, Bodek said. If approved, she hoped the program will be rebooted next year. ■

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REAL ESTATE QUARTERLY November 11-24, 2014 10 to 20 percent. And the buyers are going, ‘Eh, not quite there,’” he said.

Last year and even early into this year, sellers were often marking up properties with the correct expectation that market demand would rise to meet the higher price.

For example, at that time, someone with a multi-family property valued at around $1 million would mark up the price to $1.2 million, Bogoyevac said. The property would sit on the market for one to three months, and then sell at list price. Sellers are still doing this – but the prices have gotten higher than investors care to pay when considering factors like the cap rate, which is the ratio of the expected annual net operating income of a property to its price, he explained.

Inflated expectations for selling price on the part of sellers coupled with low inventory has slowed the rate of sales transactions this year, both Christopher and Bogoyevac observed. But the slowdown is not indicative of a lack of demand. “If you were to take a property to market based on a recent sales comp and price it accordingly, you’re going to get a lot of offers,” Bogoyevac said.

Christopher estimated prices for multifamily properties in Long Beach have risen between 10 to 15 percent this year due to high buyer demand and low supply. “The prices have worked their way back up to where they were in 2006,” he said. He expected prices to continue to rise as long as interest rates remain in the low 4 to 4.5 percent range and if landlords are able to increase lease rates.

In the short term, Bogoyevac expected

Long Beach Business Journal 7-B sales prices to remain stable through the end of the year, without much appreciation.

“I think we are going to see continued flatness through the rest of the year in terms of value,” he said. “What typically spikes value are interest rates. They are just so low that I don’t see them getting lower, and therefore it is going to be harder to justify another push in price,” he explained.

Rental rates in Long Beach decreased in the first two quarters, according to both a Marcus & Millichap report and the 2014 University of Southern California Casden Multi-Family Forecast. Both reports estimated rental rates decreased by about 1.5 percent in that time frame. However, the Casden Forecast, released in October, projected rental rates in Long Beach would increase steadily through at least the second quarter of 2016 from the current average rate of about $1,400 to about $1,550 per month.

“My survey of ownership is that people are starting to implement rent increases and they are targeting that 5 to 8 percent range on an annual basis,” Christopher said. “The vacancy rate is very low . . . [at] 3 or 4 percent, maybe. So I don’t see any problem with bringing rents a little higher in 2015,” he said.

Johanna Cunningham, executive director of the Apartment Association, California Southern Cities, also expected rents to increase.

“We are starting to see an uptick in how much is being charged for rents,” she said.

Rental rates should increase at a “slow and steady” pace to match the pace of economic recovery in the region, she added. ■

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REAL ESTATE QUARTERLY 8-B Long Beach Business Journal

November 11-24, 2014

Real Estate Developments Are Planned An ■ By SAMANTHA MEHLINGER Senior Writer igh demand for multifamily and industrial space in Long Beach continues to drive new developments throughout the city, with most apartment construction concentrated in Downtown Long Beach and virtually all new industrial construction centered around Douglas Park in Northeast Long Beach. The retail sector is also beginning to spur development activity as DDR Corp., the management firm overseeing The Pike at Rainbow Harbor, has solidified plans to turn The Pike into an outlet shopping center.

The Business Journal spoke with the developers of some of these projects, as well as Long Beach Development Services Director Amy Bodek in late October, to get a comprehensive grasp on the status of developments around town.

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1. Restoration Hardware, which is expanding to the second floor.

2. Site for a new retail building across from Hyatt The Pike Long Beach hotel.

3. H&M Clothing Store opening in 2015.

4. Renovation of 110 W. Ocean Boulevard building into apartments.

5. Multi-family complex

by Lennar.

Outlets At The Pike About a year after news of plans to turn The Pike into an outlet mall surfaced online through real estate developer EWB Development’s website and were later removed, DDR has submitted plans to the California Coastal Commission to turn the shopping center into outlets. The plans are to be reviewed at the commission’s meeting on November 14.

“They are going to have all new signage, all new façade improvements and then they are doing a brand new two-story building in front of the Hyatt The Pike Long Beach,” Bodek told the Business Journal. The 508,550-square-foot building is for “commercial retail and entertainment” use, according to a Coastal Commission document.

Bodek estimated the plans allow for about 15 to 20 tenants throughout the center. DDR confirmed it is seeking outlet store tenants, although some are likely to be traditional retailers, including H&M, she said. In late October, DDR announced it was consolidating eight retail pads on two floors of The Pike to accommodate a 24,000-square-foot location for H&M. One of those pads was previously occupied by Cold Stone Creamery, which is relocating elsewhere in the center, a statement from DDR said. H&M is scheduled to open in the second half of 2015.

Other construction underway at The Pike is for the Restoration Hardware outlet, which opened at the center in 2013. The store is expanding upward to take additional space on the second floor, Bodek said.

State staffers are recommending the project for approval, according to the coastal commission report. “I suspect by mid-December it is going to be quite a construction zone down there,” Bodek said.

Other Downtown Developments Demand for rental units continues to spur a wave of multi-family real estate developments in Downtown Long Beach.

Six apartment and loft complexes are currently under construction between Elm Avenue and Long Beach Boulevard from east to west, and from Ocean Boulevard to as far north as 6th Street. Three more have submitted plans to the city for developments in the downtown core off Pine Avenue and Ocean Boulevard. In total, these developments represent 1,244 new multi-family units in downtown alone.

The biggest multi-family complex now under construction is The Current, a $70 million, 17-story, 223-unit tower at 707 E. Ocean Blvd. According to Ryan Altoon, executive vice president with developer AndersonPacific, LLC, workers are currently installing the building’s foundation.

Once that is complete, construction on the subterranean parking structure will begin.

“We should start seeing the building substructures being built from now into the beginning on January,” he said. “From February through August is when you should start seeing the tower.” The luxury apartment building should be complete by the second quarter of 2016, Altoon estimated.

Demolition of an office building is underway to make way for a new 222-unit complex called Parc Broadway at 245 W. Broadway, which is being marketed to young professionals. “There are only two floors left. Half the building is gone,” Michael Bohn, design director and principal with design firm Studio One Eleven told the Business Journal.

Demolition for the building is a lengthier process than for most projects because workers are meticulously removing any recyclable materials from the building.

After the building is demolished, the next step is to relocate an L.A. County storm drain beneath the building into the street, Bohn said. “We have to work with a lot of different jurisdictions [to relocate the drain],” he said, which makes the process more complex. He estimated the site should be ready for construction of the new multi-family building by June 2015.

Located around the corner from Parc Broadway is the Pine Square project at 250 Pacific Ave., where 69 multi-family units are being built beneath an existing elevated rental complex. Bodek estimated construction should be complete within the next few months, by early 2015.

Construction to convert a former city office building at 100 Long Beach Blvd. into 156 multi-family rental units should be complete by the middle of 2015, according to Richard Lewis, principal with JR van Dijs, Inc., the construction management firm on the project. Ratkovich Properties is the developer of the project, called the Edison Lofts. Current construction work includes replacing the glass door entryway, installing structural steel for penthouses and constructing a rooftop pool, Lewis said.

Also nearing completion is AMCAL Housing’s Urban Village, a 129-unit market rate apartment building at 1081 Long Beach Blvd. According to Stephen Clarke, senior project manager at AMCAL Housing, the building should be complete by the end of the year. No tenants have been secured for the 5,000 square feet of ground floor retail space but there are prospective tenants, he said.

In the East Village Arts District, the framing of a 30-unit loft development by Urban Pacific Multi-Housing, LLC at the corner of 6th Street and Elm Avenue has been completed. Called the 6th Street Lofts, the project should be finished in the second quarter of 2015, according to Scott Choppin, founder and CEO of Urban Pacific.

Three multi-family projects, two of which involve adaptively reusing historic offices buildings, are located within one block of one another in downtown. Located behind The Pike, conversion of office space in the Ocean Center building at 110 W. Ocean Blvd. into 75 multi-family units has been proposed by owner Levy & Associates, with Studio 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 dog park and community room, according to Bohn. The Cultural Heritage Commission is scheduled to hear an update on the Ocean Center project on November 10. If the commission green-lights the project, designs may be solidified and the project may go out to bid, Bohn said.

Directly beside the Ocean Center building at 150 E. Ocean Blvd., Lennar Multifamily Communities is moving forward with plans to build a 216-unit multifamily project, according to Bodek. The project was originally proposed before the recession and was put on hold. Because plans were approved years ago, the project is able to go through a lesser level of environmental review at this point, Bodek explained. “They are going to submit for

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REAL ESTATE QUARTERLY November 11-24, 2014

Long Beach Business Journal 9-B

ed And Underway Throughout Long Beach

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

Plans to convert office space at the nearby former Security Pacific National Bank building at 110 N. Pine Ave. into 118 multifamily units designed by L.A.-based David Takacs Architecture have been approved, according to Bodek. “As of now, it is up to the project applicant to pull their building permits and start construction,” she said.

Another adaptive reuse project is the Psychic Temple, a creative office space nearing completion at a historic building at 244 E. Broadway. The core and shell of the building have been completed, according to Lewis of JR van Dijs. The future tenant, a creative advertising agency called interTrend Communications, is scheduled to move into the building by the end of the year, he said.

Douglas Park Area Douglas Park, the Sares-Regis owned office and light-industrial business park located between Carson Street and the Long Beach Airport off Lakewood Boulevard, continues expanding as more companies seek to relocate there.

Nearing completion in the heart of the business park are two medical office buildings by Urbana Development, of which Richard Lewis is also a principal. The buildings, which measure about 38,000 square feet and 52,000 square feet, should be completed by the end of the year, Lewis said.

Long Beach Gastroenterology, Columbia Pediatrics Medical Group, Laser Skin Care, an imaging center, a pharmacy and a blood laboratory are relocating from other areas of Long Beach to the new buildings.

Urbana is also under contract to build a new 40,000-square-foot headquarters building for Nautilus International Holding Corporate, which is relocating from Wilmington. Lewis estimated construction

Inside Mercedes Long Beach Construction is underway for administrative offices, a training center and a vehicle preparation center at Mercedes-Benz USA Western Region offices on Lakewood Boulevard. The firm, which signed a 15year lease for the two-building, one million-square-foot site, is expected to move in during the second quarter of 2015.

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

may begin as early as February, and the project is scheduled for completion in December 2015.

Also under construction at Douglas Park is a 58,796-square-foot building for Shimadzu Aircraft Equipment USA, the aircraft manufacturing division of Shimadzu Precision Instruments. The aircraft manufacturer is relocating its headquarters to Douglas Park from Torrance.

The company hopes to move its staff into

the new location by March 2015, according to a Shimadzu representative.

The conversion of a former Boeing aircraft manufacturing facility at the northeast corner of Lakewood Boulevard and Conant Street into the Western Region Offices for Mercedes-Benz USA is well underway across the street from Douglas Park. The 1.1 million-square-foot facility is scheduled for completion in the second quarter of 2015, and will also house a Vehicle

Preparation Center and Learning & Performing offices.

Directly across Conant Street from Mercedes, Sares-Regis plans to build a new Pacific Pointe East business park with three 100,000-square-foot-plus light-industrial buildings. “I suspect they will be in a position to break ground probably in mid2015,” Bodek said.

Southeast Long Beach The largest planned retail development in Long Beach in years is still months away from moving forward. Taki Sun, Inc., the owner of a property at the southwest corner of 2nd Street and Pacific Coast Highway currently occupied by the existing Seaport Marina Inn, has proposed a new retail center for the site. Plans for the proposed twostory center include more than a dozen retail pads, a movie theater, offices and parking. A draft environmental impact report (EIR) is still being prepared for the project, Bodek said. “We hope to have that EIR out by early next year for circulation,” she said, adding that most EIRs have about a 45-day comment period, after which responses are prepared by the city. “It could take nine months to get to the planning commission,” she said.

Bixby Park Area At 2010 E. Ocean Blvd., demolition of the existing Beach Plaza Hotel, where Cherry Avenue ends, is scheduled to begin in the first quarter of 2015, according to Mike Murchison, a representative for property owner, Silversands Properties USA. The company plans to build a 40-room hotel and 56 adjacent multi-family units. ■ (Photographs by the Business Journal’s Thomas McConville)

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REAL ESTATE QUARTERLY 10-B Long Beach Business Journal

November 11-24, 2014

Office Space ■ By BRANDON FERGUSON Staff Writer

Local Office Market Remains Stable, But The Outlook Is Promising

A

ccording to the 3rd quarter market report issued by Cushman & Wakefield’s Long Beach office, vacancy rates for office space in the city remained stable, as did average asking rental rates.

The report indicated that the Downtown Long Beach market ended the July to September quarter with a 20.77 percent vacancy rate, while the remainder of the city – referred to as the suburban market – fared better at 17.58 percent vacancy.

David Smith, senior vice president at CBRE Inc., put the vacancy rates for downtown at 22.2 percent and the suburban market at 17.1 percent.

While the numbers aren’t particularly thrilling, activity and interest is starting to pick up in areas surrounding Long Beach.

Smith explained that the office sectors in Orange County, West Los Angeles and El Segundo have seen increases in activity, which bodes well for the Long Beach area.

“Some of the other markets like Long Beach have dragged behind but are finally starting to see that uptick in activity that we’ve all been hoping for and expecting for quite some time,” Smith said.

Becky Blair, left, president of Coldwell Banker Commercial BLAIR WESTMAC, is pictured with Associate Sheva Hosseinzadeh in front of one of the agency’s latest 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 square feet 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)

Kevin Shannon, who serves as CBRE Inc.’s vice chairman of institutional properties group, said the outlook is promising.

“The capital market gods are smiling on

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

the fundamental real estate markets are improving.”

Toliver Morris, owner of WM Commercial, which manages the Landmark

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REAL ESTATE QUARTERLY November 11-24, 2014 Square tower, explained that lower prices in the Long Beach area make downtown an attractive spot for national companies.

Meanwhile, recent talk of a new civic center, an outlet mall at The Pike and more residential options is sweetening the pot.

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

Landmark Square is home to California Resources Corporation, a spinoff of Occidental Petroleum. Since Occidental announced it would be moving its headquarters to Texas, many have speculated as to where the company spinoff will locate its California headquarters. Morris declined to comment on the company’s future; however, Cushman & Wakefield’s market report indicated that, in the 3rd quarter, California Resources expanded its Landmark Square office space.

According to Becky Blair, president of Coldwell Banker Commercial BLAIR WESTMAC, smaller businesses are also getting into the game.

“We are seeing startups, maybe 2,000 to 4,000 square feet, especially from the medical sector and technology companies,” Blair said.

But, she explained, while more tenants are coming back to downtown, the area presents challenges, especially when compared to the suburban area of Long Beach. “[Downtown office] is certainly slower than industrial and retail but it also seems to struggle compared to the suburban area

Long Beach Business Journal 11-B of the airport, which has good freeway access and other amenities,” Blair said.

With technology changing the way people work, changes in the types of offices companies seek are happening as well.

“People are of course more mobile now so it’s not necessary for them to sit in the office and have a big presence to see clients in. They travel and are not really tethered by location any longer. So much of our work is done online and over the phone,” Blair said.

Smith explained that younger, tech-oriented companies are moving away from what he called 1980s and ’90s-style spaces with dropped ceilings and lots of private offices in favor of more open environments.

“They’re looking for gathering space outside of the building where people can eat, sit, relax and work with Wi-Fi access and laptops. Not looking to be sitting in their office looking at the same computer screen for eight hours a day,” Smith said.

Morris explained landlords are increasingly converting existing space into what he called ‘creative space.’

“It’s typically exposed ceilings, hard floors, maybe some exposed brick or concrete elements. They love to have operable windows if they can, lots of natural light typically. That’s kind of the nature of the creative, which is the antithesis of the drop ceiling, cubicle farm, cut-pile carpet, fluorescent lighting,” Morris said.

In its market report, Cushman & Wakefield forecasted a generally positive outlook for the office sector thanks to an increase in employment, which is expected to soon surpass the pre-recession peak.

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

The report also said that, though an increase in new inventory in the El Segundo market is expected to create more competition for the South Bay, rental rates are expected to increase as the “South Bay market continues to see spillover demand from the neighboring Westside in the entertainment and tech sectors.” ■

Industrial Space ■ By BRANDON FERGUSON Staff Writer

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

T

hird quarter real estate figures indicate that an already-tight industrial market recently got a bit tighter. But, even as supply dwindles, local brokers are keeping busy.

“It’s been red hot,” said Brandon Carrillo, a principal with the Long Beach office of Lee & Associates. “I think if you talk to any broker right now, there’s been a huge surge in activity.”

The Lee & Associates 3rd Quarter Market Report shows that vacancy rates in the port area are currently at 2.5 percent, while the vacancy rate for the entire South Bay is at 3.8 percent – a 10 percent drop from the previous quarter. According to the report, the drop in available product has led to an increase in lease rates.

“Asking rents increased again in the 3rd quarter to $.64 net from $.61 net the previous quarter, as the supply of available buildings diminished over the past three months,” the report read.

In the City of Carson, where the Watson Land Company brokers lease deals, limited supply is having a push-pull effect on rates.

“There’s definitely upward pressure on rental rates,” said Lance Ryan, senior vice president of marketing and leasing at Watson Land Company. “There’s also been a downward pressure in terms of concessions like free rent and tenant improvements as a result of that because you have more customers vying for fewer opportunities in terms of available space.”

Ryan said last month his company secured a lease agreement with the Atalanta Corporation. The company is consolidating several different existing facilities into one 200,000-square-foot location in the Watson Industrial Center.

Though he said he wasn’t able to discuss the terms of the agreement, Ryan explained the company will use the space to warehouse food.

“They’ll be doing a combination of import and export of food products. They’ll (Please Continue To Page 13)

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REAL ESTATE QUARTERLY 12-B Long Beach Business Journal

Automotive Trade School Breaks Ground At Douglas Park; Company Reveals Diploma Focuses And Campus Plans ■ By SAMANTHA MEHLINGER Senior Writer

November 11-24, 2014

G

one are the days when Douglas Park was just a vacant and dusty plot of land. New buildings continue to crop up at the light industrial and office business park, with the latest 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 trade school. 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 October at Douglas Park following approval by the Planning Commission in August. Chad Freed, senior vice president of business development and general counsel for UTI, told the Business Journal the company is investing between $17 million and $20 million in the new campus. “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 construction timeline. “We think construction will be complete in early- to mid-summer [of 2015]. We will be teaching on site in late summer to early fall,” he added. The exterior design of the building is slightly different than others within Douglas Park, but is in keeping with the same quality, according to a Long Beach Development Services staff report.

Campus plans feature 77,000 square feet of training laboratories, 10,000 square feet dedicated 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 campus 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, the Long Beach campus is dedicated to automotive-related diploma programs in professional automotive 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 identify original equipment manufacturers to partner with on the programs, such as Mercedes-Benz or Honda, he added. Mercedes has the closest proximity to the future UTI campus; the company is currently building a facility across the street on the corner of Lakewood Boulevard and Cover Street on a 1.1 million square-foot property formerly used by The Boeing Company to manufacture aircraft.

Long Beach was selected for UTI’s newest campus following a comprehensive evaluation of areas with the most potential for growth for the company, Freed said. In addition to being centrally located to areas with high demand for UTI’s services, including Northern Orange County and Southern Los Angeles County, Long Beach is in close proximity to many relevant job opportunities for future students, he added.

One of the key reasons Long Beach was chosen was the demand from original equipment manufacturers, Freed said. “Why [we decided] this is an area that is desirable for UTI has a lot to do with listening to the OEMs, and them telling us where they want us to be,” he said.

“There is a strong fleet presence within the southern L.A. market and there are also a lot of dealerships, especially what I would consider premium-branded dealerships,” Freed added. “Those tend to have strong pay, good benefits, paid vacation and those types of things, so those are good places for our students to end up.” About four out of five UTI students are hired after completing their diplomas, Freed said. “We have a whole team of people dedicated to helping students get jobs.”

In spring 2015, UTI plans to conduct local hiring to fill the 85 staff and personnel positions at the Long Beach campus, according to Freed. “We will be looking for people who are experienced technicians in particular to be instructors, so we will have a large number of instructors who are very specific in their skillset,” he said. “We will be hiring people in advance of opening to go through a training program. Some of the people that we hire will be experienced instructors and some of them might be very experienced technicians who have less experience from an instructor perspective,” he explained.

The Phoenix-based UTI has 11 campuses focusing on transportation technical education in eight states, including California, Florida, Texas, North Carolina, Illinois, Pennsylvania, Massachusetts and Arizona. The company, founded in 1965 as a small automotive training facility. ■

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REAL ESTATE QUARTERLY November 11-24, 2014

Industrial Space (Continued From Page 11)

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

In Northeast Long Beach, on the sprawling 100-acre property formerly owned by The Boeing Company and now known as Douglas Park, several buildings are currently under construction. In September, the Business Journal reported that the Long Beach Planning Commission green-lighted a trade school operated by the Scottsdalebased Universal Technical Institute. The building, which will be located north of Conant Street between Worsham and Bayer Avenues to provide space for 800 students and 85 faculty, will train automotive technicians. According to a press release issued last week by Sares Regis Group (SRG), which is overseeing construction of the buildings at Douglas Park, UTI agreed to a 15-year lease for the 136,965 square-foot building. The built-to-suit lease agreement is valued by SRG at more than $30 million.

“UTI joins other prominent companies planning for growth that see Douglas Park as a chance to claim a piece of the South Bay’s last tract of prime commercial land,” SRG’s Senior Vice President of Commercial Development Larry Lukanish said in a statement.

Along with UTI, other companies setting up shop at Douglas Park include Shimadzu Aircraft Equipment USA, which is relocating its headquarters from Torrance to a 53,000-square-foot building, and terminal

Long Beach Business Journal 13-B operator Metro Ports, which is moving its headquarters from Wilmington to a 40,000square-foot building. Both buildings are expected to be completed by 2015 and add to the growing number of corporate headquarters in Long Beach.

Like Carson, Long Beach, and other areas of the South Bay, Signal Hill also continues to experience low vacancy rates when it comes to industrial properties. According to Patrick O’Healy, owner of O’Healy Commercial Real Estate Services, vacancy rates in the city are lower than 2 percent.

“The biggest problem we have is the lack of product,” he said. But O’Healy was quick to add that low supply doesn’t translate to less work. In recent weeks, late nights at the office have become more common, and he said he’s been swamped with calls from interested parties about properties from Signal Hill to Carson.

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

He’s currently in negotiations on three other properties, two of which are located in Long Beach.

“I think there’s just a full spectrum of buyers that we’re seeing that want to buy property. Two of the transactions I’m negotiating are with developers. I haven’t done a deal with a developer in five years,” O’Healy said.

When asked what he thought was behind the sudden surge of activity, O’Healy gave an increasingly common response.

(Please Continue To Next Page)

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REAL ESTATE QUARTERLY 14-B Long Beach Business Journal

1.

November 11-24, 2014

Douglas Park Medical Office Campus consists of two buildings with a combined 90,000 square feet and have been sold to doctor groups. The

larger 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 in

Wilmington 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)

“I believe there’s been a tremendous pent-up demand for properties that’s probably been there certainly over a year,” O’Healy said. “I think the marketplace has really solidified a lot for businesses to finally say, ‘Okay, I’m going to bite the bullet and take on more overhead.’”

But, though activity in the industrial market may be bustling at the moment, O’Healy cautioned that many companies across the country don’t have confidence in either the current administration or other politicians when it comes to fostering a business-friendly environment. He referred to a recent speech made by Hilary Clinton at a Boston political rally in which she stated that corporations don’t create jobs.

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

For Carrillo, uncertainty surrounding the ongoing negotiations between longshoremen and port merchants, as well as port congestion stemming from questions over chassis management, is having ripple effects on the industrial market. He explained that recent discussions that he was having with logistics companies interested in occupying warehouse space near the port fell apart.

“It’s just one of those things where no one knew what was going on and you have ships anchoring offshore trying to figure out what’s the slowdown. It’s just bad for business,” Carrillo said.

Also of growing concern, Carrillo said, is uncertainty over the future of interest rates in the wake of the Fed’s recent decision to end its bond-buying program. While some brokers have expressed confidence to the Business Journal that interest rates will remain low, Carrillo isn’t quite as con-

vinced. He said he wonders whether the current surge in activity is an indication that people are taking advantage of low interest rates while there’s still time. He further explained that he’s seen businesses buying property and simultaneously borrowing additional money to purchase equipment.

“It’s been a big guessing game where interest rates are going,” Carrillo said. “They want to bundle that loan. Better to do it now rather than later, when everyone’s guessing interest rates [will] start going up.” ■

Retail Space ■ By BRANDON FERGUSON Staff Writer

Retail Space Experts Describe Strong Market, Reduction In Vacancy Rates

L

ocal brokers are describing a healthy retail 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 the market and the banks have a very strong willingness to lend,” said Adam Friedlander, a broker in the Long Beach office of Marcus & Millichap. “Buyers at the table are able to obtain very attractive loans and put good debt in place at low interest rates, and that essentially is what’s keeping these cap rates compressed.”

Friedlander explained that active tenants in the market include Circle K, 7-11 and Dunkin’ Donuts. He recently closed a sale on a McDonald’s located in Torrance on Crenshaw Boulevard. The sales price totaled $3,300,000 with a 3.45 percent cap rate. Marcus & Millichap also closed

escrow last quarter on a Long Beach Walgreens located at 2627 Pacific Ave. The property sold for $6,450,000 with a 4.5 percent cap rate.

“Properties that are well located, offer good visibility and [are] in dense infill locations with strong traffic counts, those properties are going to have a low vacancy rate,” Friedlander said.

Doug Shea, president of INCO Commercial, told the Business Journal that, in Long Beach, hot retail properties continue to be located in Belmont Shore.

“Belmont Shore by far probably outpaces any other region by, I’d say, by 40 percent, easily,” he said. “If you think about it, where else do you want to be? The foot traffic is amazing down there.”

Like Friedlander, Shea sees continued growth in the near term. But as available space becomes less abundant, lease rates will increase. He points to one of INCO’s recent listings, the former Roe Restaurant & Fish Market located at 5374 E. 2nd St. According to Shea, it’s listed at close to $5 per square foot per month. Shea said shrinking vacancy rates will likely have an effect on future investment as well.

Currently, he said, investors can expect a 10 percent return on their investment.

“Probably for 2015 we’re only going to see about a six percent return because of demand. With demand you’ve got higher prices. With higher prices you’ve got less return,” he said.

Shea added that he expects interest rates to remain low despite the Fed’s recent announcement that it would be ending its quantitative easing program.

“Even though the Fed has stopped buying bonds, they’ve still promised to keep interest rates low. So that should help the real estate market for quite some time,” he said.

According to a market report for the greater Los Angeles area issued by CBRE, third quarter vacancy rates for retail spaces in the South Bay, which includes Long Beach, have dropped to 3.2 percent – down from 3.6 percent in the previous quarter.

CBRE Senior Associate Mitchell Hernandez explained that he sees the retail real estate industry as strong, adding that he sees an approaching “inflection point,” a term used in calculus to describe a change in a curve. The change he said, is due to the expanding use of social media in advertising, which can have wide-ranging benefits for brick and mortar retailers.

“Maybe they have a strong social media campaign and they pull in other customers off Belmont Shore and Bixby Knolls or anywhere else throughout the region,” Hernandez said. “This inflection point is really an opportunity to drive and penetrate retail brands.”

He added that brick and mortar stores are here to stay despite ongoing competition from online resources.

“Experience is best experienced in person, not online, not on a phone. Brick and mortar is the gateway to all of that,” he said.

Last quarter CBRE successfully secured a lease agreement with Starbucks, which opened a new location across the street from the Governor George Deukmejian Courthouse in Downtown Long Beach.

Though Hernandez declined to offer the specific terms of the agreement, he said Starbucks decided on a larger building than usual.

“At that location they took a larger footprint than they needed,” he said. “Just another testament to how strong they felt about it. With the courthouse being there, they were really thrilled and they’re even considering extended hours, [selling] beer and wine. There are a lot of things they’re looking at that they otherwise don’t consider at other locations.”

Hernandez also said a new tenant will soon occupy the former Loehmann’s space located in the Marina Pacifica at Pacific Coast Highway and East 2nd Street.

Though he declined to say who the tenant is or how much they paid to occupy the space, he said the retailer is expected to move in by fall of 2015.

“It’s a retail use that’s going to be complementary to the merchandising mix of the shopping center,” he said.

In Northeast Long Beach, Jim Ault is president of JAMCO Equities Inc., which manages the Parkview Village Shops. He recently told the Business Journal that the shopping center, which totals 112,119 square feet, currently only has 1,957 square feet available.

“With respect to our center, Parkview Village, we actually are at the highest occupancy rate for retail we’ve ever been at. We have exactly one retail space available,” Ault said.

He said he’s also seen upticks in business in other areas where he manages properties, including Corona and Santa Monica.

When asked what he thinks is driving the increased investment in retail, Ault said he thinks people have grown tired of waiting.

“There’ve been a lot of people just sitting on the sidelines waiting to see what the economy is going to do,” Ault said. “I think at some point people finally realized, ‘Hey, I can do this, and it’s time to do something.’” ■

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REAL ESTATE QUARTERLY November 11-24, 2014

Long Beach Business Journal 15-B

Leases And Transactions Jupiter Holdings, which owns the 11story, 292,540-square-foot office building known as Topaz at 222 W. 6th St. in Downtown San Pedro, reported the following transaction: • Regus, the world’s largest provider of flexible workplaces with more than 1,500 business centers, has signed a lease to occupy 15,000 square feet on the fourth floor of Topaz. Phil Brodkin, regional director of Regus, said, “Having been in the market to find that ideal location to serve our South Bay customers, the discovery of Topaz here in San Pedro was a complete eye opener.” Topaz, which opened earlier this year, is 30 percent leased as of October.

Inco Company announced the following transactions: • An 8,590-square-foot industrial property at 5531-5529 Cherry Ave. in North Long Beach was sold for $1,150,000.

Inco’s Brad Miles handled the transaction.

• A 4,064-square-foot industrial property at the northwest corner of Olive Avenue and 27th Street was sold for $1,550,000.

Miles handled the transaction.

• Howard Service Group signed a fouryear lease for 9,108 square feet of industrial space at 2755 Seaboard Lane in North Long Beach. Inco’s Paul Phillips handled the transaction.

• Inco also announced the following transactions outside the local market: Limo4Me leased 1,530 square feet of office space at Peter’s Landing in Huntington Beach, with Doug Shea handling the lease; Athlete’s Nutrition leased 1,500 square feet of retail space in Oceanside, with Inco’s David Baker handling the transaction; and Baker also handled an 1,830-square-foot lease for industrial space in Laguna Hills.

• Long Beach Advanced Orthopedics signed a five-year lease for 3,445 square feet of office space at 1760 Termino Ave., Suite 208 in Long Beach. Inco’s Shea and Miles handled the transaction.

• Art Hermosillo signed a three-year lease for 1,600 square feet of industrial space at 1884 Freeman Ave. in Signal Hill.

Inco’s Shea and Peter Pappageorge handled the transaction.

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. in Lakewood. Carrillo brokered the sale of the building to TFC Manufacturing Inc. for $7.6 million. The company specializes in fabrication and serves the military, aerospace and commercial industries. The building’s former owner, Rena Biotech, was represented by CBRE Inc. (Photograph by the Business Journal’s Thomas McConville)

• Brascia Builders signed a five-year lease for 2,847 square feet of industrial space at 2801 E. Anaheim St. in Long Beach. Shea handled the transaction.

• Keith Attardo leased 14,040 square feet of office space for five years at 4132 Katella Ave., Suite 104, in Los Alamitos.

Inco’s Shea and Shannon Allen handled the transaction.

Lee & Associates announced the following transactions: • TFC Manufacturing purchased a 57,600-square-foot industrial building at 4001 Watson Plaza Dr. in Lakewood for $7,604,000. The building was sold by Rena Biotechnology. Lee’s Brandon Carrillo handled the sale.

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

• Long Beach Urgent Care signed a fiveyear lease for 2,195 square feet of retail space at 6555 E. Pacific Coast Hwy. in The Marketplace. Lee’s Aguirre and Lieppman handled the transaction.

• Integrated Health Management leased

865 square feet of office space at 249 E. Ocean Blvd. Lee’s Shaun McCullough and Jeff Coburn represented the landlord and Quint Carroll from Cushman & Wakefield represented the tenant.

• A 5,080-square-foot office building at 4120-4122 Atlantic Ave. in Bixby Knolls was sold by $750,000. Lee’s McCullough and Coburn handled the transaction.

• Lee & Associates also announced the following transactions outside the local market: BHK Property LLC purchased a 5,000-square-foot industrial building in Gardena for $595,000. Lee’s Mark Brunner and Keller Williams’ Rene Garcia handled the transaction; Major Logistics leased a 15,916 square feet of industrial space in Gardena. Carrillo and Massaro handled the transaction; Alaska Baja Pacific leased 5,920 square feet of industrial space for three years in Norwalk. Carrillo handled the lease for Lee; and Freightsaver.com, LLC leased 3,305 square feet of office space in Huntington Beach, with Lee’s Coburn, McCullough and Stephen Takahashi handling the transaction.

O’Healy Commercial announced the following transactions: • SunRise Plumbing signed a three-year lease for 15,694 square feet of industrial space – including office, warehouse and yard – at 5259 Cherry Ave. in Long Beach. SunRise is a plumbing contractor.

Patrick O’Healy, SIOR, represented the owner, Louis Tilley, while Lee & Associates’ Garrett Massaro and Carillo represented SunRise.

Coldwell Banker Commercial BLAIR WESTMAC announced the following transactions: • Rose Park Roasters, LLC, signed a five-year lease for 2,327 square feet of retail space at 795 Long Beach Blvd.

Becky Blair and Sheva Hosseinzadeh handled the transaction. ■ (Call 562/988-1222 for a pdf of the form to complete to be listed in this section.)

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