In 2014, Magellan acquired a 26.8 acre former manufacturing site located in El Monte, California. While the superb infill location and favorable market conditions presented a significant opportunity, the site’s location in a Superfund and an entitled site plan no longer appropriate for the market presented significant pre-closing challenges.
The property is located in the San Gabriel Valley, the densely populated infill submarket of Greater Los Angeles. Situated approximately 30 miles from LAX and the ports of Long Beach and Los Angeles and with convenient access to several major freeways, the property’s location allowed the development to serve both the local San Gabriel markets and the entire Los Angeles Basin.
The market conditions at the time of the acquisition were highly favorable for Magellan. Between 2007 and 2013, only 2.5 million SF of new construction was added to the San Gabriel Valley Industrial submarket (on a base of 167 million square feet) and vacancy rates were low at 4.6%. With approximately 90% of the buildings in the San Gabriel Valley having been built before 1990, the demand for new industrial product was high while competition was minimal.
The opportunity was burdened, however, by the extensive environmental history of the property and by an approved site plan no longer feasible for the market. By assembling a sophisticated development team experienced with both environmental matters and with design, marketing, entitlement and construction challenges, Magellan was able to effectively address the environmental risks on the site while obtaining city approval on a revised site plan optimized for market and financial success.
Magellan designed and built a LEED certified, Class A industrial project configured to appeal to a broad range of midsized industrial users with state-of-the-art features and functions including 30 foot clear heights, ESFR sprinklers and 100% concrete yards. All five buildings were also overlaid with a condo map and evaluated by a "feng shui" expert to broaden and optimize the appeal to the local market.
The project was completed in August 2016 with three buildings pre-sold. A fourth building was subsequently sold to two separate condominium buyers. The fifth and largest building on the site was leased to a leading e-commerce company for 10 years, and subsequently sold to an institutional buyer.
In 2017, Magellan Gateway was awarded "Gold" for the "Best Industrial Project" in Los Angeles County by the Los Angeles Business Journal,
Read more from the Press: