SOUTH GATE, Calif. – DAUM Commercial Real Estate Services has secured the 10-year lease on a “Special Purpose” industrial food processing facility totaling approximately 60,000-square-feet and situated on 2.78 acres of land in the Los Angeles County submarket of South Gate, California, according to Dennis Sandoval, a Principal and Executive Vice President at DAUM who represented the lessee, Prodalim Group USA, alongside DAUM Associates Kevin Sandoval and Bryan Sandoval.
The new tenant is a division of Prodalim, a multinational, Israel-based beverage company with more than 30 years of experience in development, manufacturing, and distribution of fruit and beverage products globally.
“Prodalim was seeking to expand its operations in the U.S. and engaged us exclusively to identify its first West Coast facility, based on our deep experience in the Los Angeles Basin, one of the most competitive industrial markets in the country,” explains Sandoval, who notes that L.A. County has continuously been experiencing historically low overall vacancy rates of 1.6% since Q4 of 2021. “While many food-related companies, in particular, are looking outside the state to fulfill expansion and relocation needs due to the competitive market, for Prodalim, the close proximity to the Los Angeles and Long Beach ports were a critical element in the site selection process, due to its fruit products and the need for quality and freshness. Major regional thoroughfares, major customer locations such as Kraft, Nestle, Langer’s, and Pepsico, and the large population hubs unique to Southern California offers growth potential which will significantly drive national growth.”
The firm ultimately identified a property in South Gate that has historically been used as a food processing facility. The new tenant will handle significant refurbishment and upgrades needed to the building to repurpose the property to a specialized refrigeration and distribution facility and optimize it for Prodalim’s operations, notes Dennis.
“We worked extensively with our client and the landlord, as well as Bob Machuca of the Los Angeles County Economic Development Corporation and the State of California Business Development and Economic Development team, to ensure that our client saw all the operational, financial, and relocation benefits that a Southern California and specifically City of South Gate location could offer,” says Dennis.
Dennis adds that the DAUM team was responsible for site selection, economic underwriting, lease negotiation, and coordination of selected consultants through finalization of lease, in order to make sure the tenant’s best interests were protected.
The total consideration of the lease, including tenant improvements, is approximately $17 million. The asset is located at 12128 and 12228 S. Center Street in South Gate, California. Arthur Rasmussen, Jr. and John Biven of CBRE represented the landlord in the transaction.