STEVE BERGSMAN is a nationally
recognized financial and real estate
writer. For more than twenty-five
years, he has contributed to a wide
range of magazines, newspapers
and wire services, including the New
York Times, the Wall Street Journal
Sunday, Global Finance, Executive
Decision, and Chief Executive.
ABOUT THE AUTHOR
Zelonker, SIOR, CCIM, a broker partner with Real Miami
Commercial Real Estate in Coral Gables. A 5 percent vacancy
market is pretty much considered a fully-leased market.
“All the REITs are here and they are building,” Zelonker adds.
“There was very little building for five or six years, now they all
When Professional Report talked to Zelonker in early spring,
he told the magazine, “I’ve got four different industrial projects
under contract and closed two in the last two weeks.”
How is Zelonker keeping busy? By working a unique part of the
“Chicago boasts over 1 billion square feet of industrial and much
of it is big distribution,” says Zelonker. “Miami is not Chicago.
We have a lot of small businesses. South Americans come to
Miami, they open small businesses.”
Zelonker eyes smaller industrial space as part of the market.
Recent deals run from a 26,000-square-foot building that will be
used for the pharmaceutical business to 165,000 square feet of
industrial sold to a REIT. Another property under contract is an
80,000-square foot structure in the East Airport area sold to a
buyer in the clothing business.
Zelonker adds, “if Southeast Florida steals 5 percent of the
business from the West Coast (after the Panama Canal redo) we
would double our business and we have so little vacancy already.”
The Port of Los Angeles, even without considering the Port of
Long Beach, is the country’s busiest port. It’s built on 4,300 land
acres ( 3,200 water acres) and counts 270 berths, 16 marinas, 86
cranes and 232 terminals.
“On this port, it is the primary driver of all our real estate,”
says Frank Schulz, SIOR, a Vice President with The Klabin
Company, Torrance, Calif., who works the industrial market
in Los Angeles. “Whether it is industrial, manufacturing,
distribution, warehousing or trans loading – everything relates
This doesn’t mean the industrial market here is a cake-walk.
In fact, it is difficult and those who succeed, as Charleston’s
Morrison noted, need to know the ins and outs and everything in
between of the import/export business.
Schulz, who is past-president of the Los Angeles Transportation
Club, says, “I work hard to understand trade, understand the
industry and the causes or effects that force people to locate
closer to the port, further from the port, and what are the most
desirable building sites based on types of uses.”
In the import business, there are so many different layers, Schulz
points out. “A product doesn’t just show up and go straight to a
store. A container comes in, for example, with sweatshirts from
Asia. The product needs to be consolidated, drayed out of the
port, tagged and stored – even before the retailer takes them
away. Understanding your client’s needs is extremely important.”
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One of the first questions Schulz asks is how many turns the company
will do with the product, because the more turns they are doing entails
being closer to where the imports are coming in. That means close-in
warehouses. On the other hand, if the client is merely warehousing a
product and it is only turning four times a year, it’s not economically
feasible for that client to be close to the port where product
Los Angeles industrial is a very crowded market with a lot of old
product that doesn’t work well with modern transport needs. Older
manufacturing buildings are often too large on land that doesn’t
have enough open space. Container trucks and over-the-road trailers
are large and need extensive space to maneuver.
Schulz has done a number of recent deals where the buyer has
reduced coverage to open up land.
His company recently sold a 14-acre site with 350,000 square feet of
structures about six miles from the Port of Long Beach.
“We convinced the buyer, an industrial REIT, to demolish 150,000
square feet of building and add additional loading to the remainder
of the building. We ended up with five acres of extra land to store
containers, chassis, etc.,” says Schulz. “People always talk about
wanting these kinds of properties because it is efficient, but the
product doesn’t presently exist here.”
Schulz’s company recently facilitated the sale of an old
manufacturing building in Torrance, about 10 miles from port. The
buyer demolished the building and constructed a state of the art,
270,000-square-foot distribution building with lower coverage, 50
dock-high loading platforms, a 180-foot rear yard, and 120-foot
“New owners need to renovate older buildings if they want to keep
up with demand created by foreign trade,” says Schulz, “and import
is the sole driver of this market.”