1. Team Experience
Custom Companies, Inc.
Challenge
Custom Companies, Inc. (CC) is an industry leading “Full Service
Transportation Company” providing warehousing and transportation services
to companies across 50 states in the US. CC had occupied two facilities
located in Carson for over 15 years and due to the CC’s growing customer
base and logistics services, the company had significantly outgrown their two
facilities. CC required a much larger warehouse footprint to accommodate
new accounts while securing a facility that could support a significant amount
of trailer storage. Furthermore, CC was in final negotiations with a client that
required the new space to be operational within 3 months and the operations
would require proximity to the Port of Los Angeles.
Action
Our team established a relationship with CC that dated back to 2014 and
had evaluated a variety of facility scenarios that did not accommodate all
facets of the operations. The ideal facility would be 250,000 sf with 40+ dock
high positions, secure yard space for 100+ containers and adequate office to
support the company’s office personnel. CC called upon our team to assist
them in identifying, negotiating and securing an optimal facility that could
accommodate not only the warehouse requirements but also the trucking
operations. Over the initial 30 days, CC and our team evaluated multiple
options resulting in 2 viable options. Given the market vacancy rate was sub
4%, both of the buildings were under negotiations with other users. Of the
two buildings, only one of them had the necessary features to support the
operational objectives of CC. However, the ideal facility was approximately
60,000 sf larger than their target square footage resulting in the desired
building being much more expensive than the alternative.
Results
Within three weeks from our original tour, our team had fully negotiated a
transaction that involved a “Full Service Gross” lease transaction whereby
all of the NNN expenses and operating costs were included in the monthly
rental rate as this was an important feature due to the contract with CC’s new
customer. Our team was able to leapfrog the previous tenant’s negotiations
and quickly secure a lease that would allow CC the ability to deliver the
required warehouse space to their new customer within 14 days from lease
execution. The fully negotiated economics included a complete refurbishment
of the 12,000 sf of office, a new ESFR fire sprinkler system, new interior
and exterior paint, upgrading and/or replacing existing dock equipment,
resurfacing the parking lot and trailer yard, multiple months of free gross
rent and a rental structure that outperformed other recent comps in the area.
CC also has no responsibility for any deferred maintenance that included
the roof, HVAC units servicing the office and ongoing maintenance. Given
the building was approximately 60,000 sf larger than what CC required, we
immediately placed the excess space on the market for sublease and are
actively negotiating with multiple subtenants whose rental income will offset
the costs of leasing a larger than required building.
Client:
Custom Companies, Inc.
Building Address:
13012 Molette Street
Santa Fe Springs, CA
Transaction Type:
Relocation
Size:
306,286 SF
Services Provided:
Tenant Representation