Dallas-based industrial developer Covington Group has purchased a vacant 77-acre site in Palmdale for $6 million from an undisclosed seller.
According to a Real Deal report, the developer plans to build an industrial warehouse of 1 million square feet or larger on spec. The site, at 400 W. Avenue M, is located less than a mile east of State Route 14 and just west of the Palmdale Regional Airport. The property is also not far from a site where a roughly 1 million-square-foot warehouse is in the works for Amazon.com Inc.
“Everybody felt it was a win-win,” Mike Radlovic of Coldwell Banker, the broker who represented the seller, told the outlet. “I could tell you that the buyer is happy, the seller is happy, the city’s happy, I’m happy.”
The Palmdale deal represents the latest in a succession of Southern California acquisitions. Last October, Covington bought the Southern California Logistics Center, a seven building, 3.4 million-square-foot site in Victorville, for $252 million — which at the time ranked as the priciest purchase of the year for the Inland Empire. That same month, Covington picked up Saugus Station, a 70-acre, 24-building industrial complex north of Santa Clarita, for an undisclosed price.
With limited inventory driving higher prices in the industrial market, investors have moved farther away from urban centers for properties such as this one.
“There is a land rush going on for large pieces of property (where) cities will allow this kind of thing,” said Radlovic. “It’s getting harder and harder.”
There has been pushback in some municipalities against industrial operators. Last month, Amazon abandoned plans for a San Francisco warehouse after the city’s Board of Supervisors passed a moratorium on new delivery hubs. In West Covina, the e-commerce giant was forced to give up on building a delivery center after protests from labor and environmental groups.
