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Damco Signs Nearly 1M-SF Lease in Santa Fe Springs

Continuing Strategy to Meet Customer Demand for Last-Mile Logistics Space
May 21, 2018
Courtesy of Damco/Goodman Group
Courtesy of Damco/Goodman Group
Netherlands-based Damco, part of Denmark’s A.P. Moller Maersk, has signed a 10-year lease for Sydney, Australia-based Goodman Group's 989,809-square-foot logistics center at the Goodman Gateway Santa Fe Springs industrial park.

Damco, whose U.S. headquarters is based in New Jersey, will take 100 percent of the six-building logistics campus on more than 75 acres at 12801 Excelsior Dr., near Interstate 5. It also has 18 acres of trailer parking.

Irvine, CA-based Goodman North America purchased the property in 2016 for $240 million, or about $171 per square foot, from Boise, ID-based Albertsons Companies, according to CoStar data.

"Goodman Gateway Santa Fe Springs is a great addition to our portfolio of assets in the Southern California market," Bill Peratt, president of Damco Distribution Services Inc., said in a statement. "This facility deepens our commitment to our customers while enhancing our ability to provide world-class logistics services."

Deal Summary:

Tenant: Damco

Size: 989,809 SF

Address: 12801 Excelsior Dr.

Landlord: Goodman North America

Landlord Rep: Louis Tomaselli and Zach Niles - JLL

Tenant Rep: David Bales and Don Smith - Lee & Assoc.
Goodman has leased nearly 2 million square feet of space in the local infill market within the last two months, according to Anthony Rozic, chief executive of Goodman North America.

"This partnership with Damco allows us to welcome a leading freight-forwarding business into Goodman's expanding Los Angeles portfolio," Rozic said in a statement.

Once owned by televangelist Pat Robertson, the site formerly housed the Cenco oil refinery. It was contaminated and had to be redeveloped by Goodman, which underwent a lengthy remediation and entitlement process to overcome environmental challenges, according to local industrial brokers who added that once the firm started to build, they were in a very tight market.

"There is little supply in the area with vacancy rates at less than 2 percent," Kim Snyder, president of the West region for Prologis, said. "The infill markets are tight, and in high demand due to their proximity to the consumer. Infill markets in L.A. County offer less than 4 percent vacancy such that the Santa Fe Springs project at the former oil refinery site has been well received by the market."

Snyder said Prologis was also once in the running for the property.

Strong economic fundamentals would drive more deals if Santa Fe Springs were not limited by the availability of space, according to CoStar Market Analytics. National logistics and distribution firms make up most of the tenant base in Santa Fe Springs.

Goodman Gateway Santa Fe Springs is part of Goodman's $2.5 billion development pipeline. It will include 17.8 million square feet of Class-A logistics space in industrial markets including L.A. and the Inland Empire, greater Los Angeles as well as northern New Jersey and central Pennsylvania.

Goodman has completed 4.5 million square feet of Class A development product in these markets over the past year, and currently has 1.7 million square feet now under construction.

Prologis is itself developing infill projects in other areas where such developments are in demand, including Vernon, Long Beach, the city of Los Angeles and Carson, according to Snyder.

Karen Jordan, Los Angeles Market Reporter  CoStar Group   
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