Newmark Grubb Knight Frank (NGKF) has completed a 318,397-square-foot industrial early lease extension and expansion valued at $11.8 million with Cambro Manufacturing, Inc., in City of Industry, California. The early lease extension is for 318,000 square feet and extends the term 64 months beyond the natural lease expiration in April 2017. The deal also includes the potential for Cambro Manufacturing to expand 215,000 square feet into an adjacent building in 2017.
Senior Managing Directors Wesley Hunnicutt and Matthew Moore from NGKF’s Newport Beach office represented Cambro Manufacturing, a Huntington Beach-based company with facilities worldwide. The landlord, Prudential-Grand Avenue Venture LLC, was represented by Marc Selznick of Unire Real Estate.
Located at 21558 Ferrero Parkway and situated on nearly 15 acres, Cambro Manufacturing has been a tenant for many years, using the facility for distributing finished goods that are manufactured at the company’s Huntington Beach facility. Cambro Manufacturing manufactures a wide variety of products and offers services including table service and display items, storage, shelving, merchandising and insulated product transport for companies within the foodservice industry.
“Our Industrial Services team negotiated a significant allowance from the landlord to make facility improvements including LED lighting upgrades and office space modifications that required immediate installation due to our client’s internal objectives,” said Hunnicutt. “We secured this early lease extension 18 months in advance of the scheduled expiration and were able to negotiate the opportunity to expand into a 215,000-square-foot portion of the adjacent building, which is occupied by a tenant through December 2017 at a locked-in lease rate.”
Moore added, “Our goal for Cambro Manufacturing was realized as we were able to insulate the client from a rising rental rate environment while securing a favorable economic package. The reality is that industrial real estate costs are significantly increasing and vacancy for quality product is less than 2 percent. If we had held off addressing our client’s continued tenancy in the building until late 2016, the costs could have easily increased by 10 to 15 percent in comparison to what we were able to achieve.”
The greater Los Angeles industrial market vacancy is at a historic low. Facilities that compare to the quality and size of Cambro’s existing space are seeing vacancies below one and a half percent.
“We anticipate rents will continue to increase seven to eight percent in this market over the next 12 months,” noted Hunnicutt. “Concessions are beginning to diminish and landlords are becoming increasingly bullish. Tenants who are evaluating future lease expirations require strategic thinking not only for how they negotiate, but also how early they begin implementing the process.”
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with London-based partner Knight Frank and independently-owned offices, NGKF’s 12,800 professionals operate from more than 370 offices in established and emerging property markets on six continents.
With roots dating back to 1929, NGKF’s strong foundation makes it one of the most trusted names in commercial real estate. NGKF’s full-service platform comprises BGC’s real estate services segment, offering commercial real estate tenants, landlords, investors and developers a wide range of services including leasing; capital markets services, including investment sales, debt placement, appraisal, and valuation services; commercial mortgage brokerage services; as well as corporate advisory services, consulting, project and development management, and property and corporate facilities management services. For further information, visit www.ngkf.com.
NGKF is a part of BGC Partners, Inc., a leading global brokerage company servicing the financial and real estate markets. BGC’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC also has an outstanding bond issuance of Senior Notes due June 15, 2042, which trade on the New York Stock Exchange under the symbol (NYSE: BGCA). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit www.bgcpartners.com.