Lionext Secures Major Distribution Facility Lease in Los Angeles County
In a notable development in the logistics sector, Lionext, a third-party logistics (3PL) firm linked to Chinese exporters, has finalized a substantial 10-year lease for a distribution facility in Santa Fe Springs, Los Angeles County. This move underscores the heightened demand for logistics space as businesses prepare for the implications of tariff policies introduced by the Trump administration.
Details of the Lease Agreement
Lionext has committed to a lease covering a total of 106,110 square feet at 11650 Burke Street. The deal, valued at approximately $22 million, was facilitated by Ryan Campbell of NAI Capital. Representing the property owner, Kekropia—a California corporation associated with local investor Larry Patsouras—were Joel Hutak and Phillip DeRousse of Lee & Associates.
Background of the Property
According to property records, Larry Patsouras’s firm purchased the land for around $377,500 in 2009, with the facility being developed in 2011. The property not only offers significant industrial space but also includes roughly 7,000 square feet of office space, providing comprehensive logistics solutions for tenants.
Increased Demand for Logistics Space
The surge in leasing activity is reflective of a broader trend among 3PL firms, particularly those aligned with Asian markets. In 2022, there was a marked increase in leasing contracts, with nearly 430 leases for spaces over 100,000 square feet signed across the United States—representing a 16% rise from the previous year. Notably, 78 of these leases were attributed to Asia-based logistics companies, as reported by CBRE in February.
Market Dynamics in Southern California
According to the same CBRE report, the **Inland Empire** and **Los Angeles County** ranked first and fourth, respectively, for the total number of leases executed by 3PL companies last year. The region’s industrial infrastructure, bolstered by its proximity to the significant Ports of Los Angeles and Long Beach, which handle approximately 31% of all international containerized shipments in the U.S., is a key driver in attracting logistics operations.
Concerns from Warehouse Owners
Despite the influx of Asian-based 3PL companies seeking available properties, some U.S. warehouse owners remain cautious. Howard Schwimmer, co-CEO of Rexford Industrial Realty, expressed during his firm’s latest earnings call that his company is wary of engaging with such businesses due largely to their limited creditworthiness. “What you hear in the marketplace are some of these 3PLs coming to the market that have no credit,” Schwimmer noted, highlighting the risks associated with such tenants.
In conclusion, the leasing activity by firms like Lionext illustrates not only the growing demand for logistics space in Southern California but also the ongoing adjustments within the global trade landscape as businesses adapt to new economic policies.
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