Blackstone plans to add to the dwindling supply of industrial real estate in Los Angeles after snapping up a 14-acre site for redevelopment.
The New York-based institutional investor paid $50.7 million–or $3.6 million per acre–on the deal in Long Beach, records show. Newmark announced the deal but did not disclose the buyer.
Plains All American, a crude oil and natural gas transportation firm, sold the property and will lease it back through at least mid-October, according to lease documents filed with Los Angeles County.
Blackstone is planning to build a 304,000-square-foot industrial building on the site, located at 5900 Cherry Avenue, which is already zoned for general industrial use. The new development would replace a storage structure currently on the site.
The South Bay is a “very supply-constrained market with limited sites for comparable new development,” Newmark’s Kevin Shannon, who represented the seller, said in a statement.
Plains All American has been selling off a number of its industrial properties, moves that come amid soaring industrial land prices over the last few years.
In 2020, the Houston-based company sold an 80-acre industrial storage site in Rancho Dominguez to Zenith Energy, which then sold the property to Rexford Industrial Realty for $217 million. Rexford then leased the property back to Zenith and Plains All American for 20 years, records show.
Blackstone’s acquisition comes as the L.A. industrial market faces extremely low vacancies. Around 150 percent more space was taken up by tenants than was brought to market in the fourth quarter of last year, according to Newmark.
In Long Beach, around 257,200 square feet of space was under construction during the same time period.
The deal is familiar territory for Blackstone, which has been pouring money into the industrial sector. Last month, the company scored $415 million in refinancing for 110 industrial properties across 15 U.S. markets.
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