Creative Flex Industrial Grows in Hawthorne, California

What’s next in industrial flex? A dozen I.CON West attendees had an up-close look at some innovative reuse of warehouse space in Hawthorne, an industrial city located about 15 minutes southwest of downtown Los Angeles. Greg Spencer, senior vice president at Terreno Realty Corporation, led the tour, explaining how his team was able to transform a 1950s-era industrial park into a modern and active location during the past year and a half.

Formerly home to traditional warehouse/light industrial tenants such as a furniture staging, storage and wire companies, the eight-building, 152,000-square-foot property now hosts a diverse mix of users including e-commerce company Box Fox, an aerospace technology incubator, and craft brewery Common Space. Higher rents in adjacent submarkets, as well as having a municipal airport and the SPACEX campus within its boundaries, has turned Hawthorne into a “catcher’s mitt” for creative and start-up space, said Andrew Dilfer of Kidder Mathews, the site’s broker. The property is currently 100% leased and has 17 tenants, typically with five-year leases.

Terreno, which focuses on infill real estate in areas with growing demand, converted not only the interior space but also the building’s exteriors and landscaping. Special attention was paid to building entrances and plantings to modernize the property yet maintain a sleek industrial feel. Terreno replaced older landscaping with drought-tolerant plants and improved the parking and truck court areas. The interior spaces include polished concrete floors and have abundant natural lighting complimented by LED light fixtures. Tenants appreciate the large ceiling heights, solid infrastructure, access to the 105 Freeway, and the wide-open interior spaces they can tailor to their unique uses.

The twenty-something women proprietors of Box Fox spoke to the group about their positive experiences within the park while running their online personalized gift box business. Their space, along with their products, project a clean, modern and feminine appeal. They said they enjoyed bringing their aesthetic into the space, remarking, “Women can do industrial, too.”

Tenants include a diverse mix of include ecommerce, fashion, tech and design specialists that all share the space in harmony. Not only do delivery trucks come and go, but consumers come to the site to visit the physical therapy center and the craft brewery. Spencer said that leasing up and managing the diverse group of tenants has not been complicated; his team makes sure that prospective tenants share the same philosophy of cooperation that the property engenders.

Terreno acquired the property in December 2017 for $28 million hoping to catch the beginning of the new Hawthorne wave. With strong industrial space demand, particularly in urban infill locations, the Hawthorne project’s light-industrial, multi-tenant yet creative approach will be one to watch.

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