Home The Magellan Group

Case Study: Magellan Gateway

Acquisition

In 2014, Magellan acquired a 26.8 acre industrial-zoned development site located at 4181-4189 Temple City Boulevard in El Monte, California with plans to develop a 502,020 SF Class “A” state-of-the-art LEED certified industrial park. Magellan’s wealth of experience in development combined with the property’s location in a market with a shortage of new industrial product and significant pent-up demand provided an opportunity to generate favorable returns on investment.

Market Opportunity

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 the 10, 605, 60,710, and 210 freeways, the property’s location allows 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.

Value Creation

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 to augment flexibility for marketing and use by the prospective new owners.

Results

The project was completed in August 2016, with three buildings pre-sold and the other two buildings in active negotiations.