Hathaway Industrial Park is a collection of ten industrial buildings totaling 543,000 square feet, spread across nine single and multi-tenant buildings that feature spaces ranging in size from 5,000 to 42,000 square feet, as well as a freestanding single-tenant building totaling 288,000 square feet. Situated on 27 acres in Santa Fe Springs, California, the park is ideally situated in the heart of the Mid-Counties industrial submarket, which straddles Los Angeles and Orange Counties, and is a prime last-mile location with access to strong demographics of more than 10.8 million people within a 25-mile radius. The park features excellent freeway access and is situated within 20 miles of the Ports of Los Angeles/Long Beach and Los Angeles International Airport.
Acquired in September 2019, Hathaway Industrial Park was a complementary addition to the Company’s existing industrial portfolio in Los Angeles, increasing the portfolio size to 2.2 million square feet, furthering the optionality to expand and move customers within our portfolio. Due to extremely high barriers to entry, the Los Angeles industrial market features low vacancy rates and steadily increasing rents. The buildings at Hathaway Industrial Park feature a variety of loading options, including dock high and ground level doors, as well as clear heights ranging from 16 to 24 feet. At the time of acquisition, rents were estimated to be approximately 25% under market, leaving room for significant upside potential.
The largest space at the property, consisting of 288,000 square feet, was set to expire within eight months of acquiring the property and the underwriting assumption was that the existing customer would not renew. Ultimately the customer decided not to renew, and the PSB team immediately began marketing the building for lease.
Leveraging the power of our national platform, the local leasing team partnered with the Company’s Northern California division to present the opportunity to the world’s largest online retailer whom the Northern California team had recently transacted with on a 213,000 square foot property in Silicon Valley. The team was able to quickly determine that the customer had a need for industrial space near Santa Fe Springs, California, and the parties came to terms quickly not only on the 288,000 square foot single-tenant building but also an additional 42,000 space located in a different building within the park. Collectively, the Company achieved rent growth of more than 30% on the 330,000 square feet of leasing production, and this 10-year deal became the largest lease transaction in the Company’s history.
“I’m proud of the success we’ve had at Hathaway since acquiring the property less than two years ago. The local team has done a phenomenal job of not only repositioning the property, but outperforming the underwriting by achieving nearly 30% rent growth across new deals and renewals. Last but not least, we’d like to thank our partners at CBRE for helping us make this recent acquisition a success.”
Mac Chandler | President and Chief Executive Officer