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Friday, Dec 8, 2023


Sfskn/–/dp1st/mark2nd By SHELLY GARCIA Staff Reporter A local developer has started construction on the first speculative industrial facilities to be built in Palmdale in more than a decade. SKN Development broke ground this fall on two buildings in the Park One Industrial Complex, and will begin construction on another two buildings in the Palmdale Trade and Commerce Center later this month. In all, SKN plans to construct 14 buildings in the Park One complex and could develop as many as four buildings in the Palmdale center, according to Gary Fischer, president of SKN. “I’m the only one doing (speculative development),” Fischer said. “You could either call me a trailblazer or a fool.” Fischer believes that as other areas of L.A. have recovered from recession, real estate and housing prices have risen considerably, positioning Palmdale as a less expensive alternative for companies that want to expand. What’s holding the area back, he said, is the lack of inventory in industrial buildings created through the years. “Most people don’t have the enthusiasm for starting from scratch,” he said of companies in the market for new facilities. “We’re not going to develop the area unless we have the inventory to sell,” he said. It can take more than 18 months to complete a building to the specifications of its user. Mid-sized companies, growing at a rapid clip, don’t have that time to wait, Fischer said. In June, Fischer, who is based in Palmdale, formed an investment group to develop properties in the Antelope Valley. The company acquired about six acres in the Park One Industrial Complex, a 10-acre site at Avenue P and Sierra Highway. SKN expects to complete the first two of its 14 planned buildings in February. SKN is currently in escrow on another two acres in the Palmdale Trade and Commerce Center at Avenue P and the Antelope Valley Freeway. The troubled complex carries bond obligations that make the cost of the property prohibitive. SKN was able to negotiate a deal with the city of Palmdale and the owner of the property, and is set to begin construction on two more buildings, ranging from 20,000 to 24,000 square feet. SKN expects to sell the buildings in the Park One complex for prices that will average $55 a square foot without customization. Prices in the Palmdale center will average $58 a square foot without customization. That compares with prices ranging from $68 to $72 a square foot in Santa Clarita Valley, Fischer said. Patricia Toro, a real estate agent with Coldwell Banker-Commercial in Palmdale, said she has had discussions with several companies that have indicated an interest in the facilities. No deals have yet been completed. Others point out that Palmdale will not be a slam dunk. While some users have recently located warehouse facilities in the area, there has not been a consistent move there. “I’ve been out there and looked four or five times, but there are such dramatic swings in that market,” said John O. Lewis, president of the Lewis Co. “If you get a blip on the horizon somewhere else, that (Antelope Valley market) goes away.” Toro conceded that activity by developers has been limited. There has been some interest in the Palmdale Commerce and Trade Center, where there is still additional land for sale, but the cost of the property and the bond obligations have kept buyers at arm’s length.

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