Covington Group has landed a new tenant at Saugus Station Industrial Center in Santa Clarita, Calif. Scenic Expressions, a provider of sets, storage and transportation for the film and television industry, signed a 299,234-square-foot lease.
Covington Group acquired the 975,300-square-foot warehouse in 2021 for $110 million. According to CommercialEdge data, the property is subject to an $84 million loan that is set to mature in 2031, provided by Starwood Capital Group.
Completed in 1955, the Class B property spans across almost 70 acres and encompasses 10 buildings, as well as 683 parking spaces. The one-story facilities feature 20- to 25-foot clear heights, climate control and loading doors. Marathon Truck Body, Builders FirstSource, Affordable Quality Moving and Storage, and Watford Moving & Storage are among the tenants at the property.
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Located at 25655 Springbrook Ave. in the San Fernando Valley, the warehouse is 33.5 miles from Los Angeles, and provides access to several routes such as interstates 5, 210 and 405. Companies in the surrounding area include Home Depot, Santa Clarita Studios, King Soundworks Santa Clarita, and LA North Studios – Tibbitts, among others.
Managing Director Brent Weirick with JLL Capital Markets acted on behalf of the tenant, while the landlord was represented by Vice Chairman Craig Peters with CBRE.
The owner of Scenic Expressions, Mark Larinto, stated in prepared remarks that his company needed a space that could not only accommodate the storage of large sets, but that was also close to Santa Clarita’s film studios. The San Fernando Valley, northwest of Los Angeles, is home to major film and television studios, which are a strong driver of industrial demand.
Tight market conditions
A Colliers report on the Valley’s industrial market showed that the overall vacancy in the area stagnated at 0.4 percent in the third quarter of 2022, and increased 40 basis points to 1.1 percent in Ventura County. The market had a construction pipeline of 844,558 square feet, including Sylmar Studios, a 300,000-square-foot, $500 million production facility for TV and film that is slated for completion later this year.
At 0.3 percent, Santa Clarita had the lowest vacancy in the Greater LA area, despite historic higher rates. This submarket also recorded the highest positive net absorption in the Valley at 313,901 square feet due to Amazon taking occupancy at its 278,000-square-foot facility in Needham Ranch, the same report showed.
A JLL report for the same quarter showed that tenants looking for space had very limited options. Industrial vacancy in the San Fernando Valley market was 0.8 percent, with only 415,751 square feet under construction.