An office building in Simi Valley that was converted to a warehouse has been leased to an e-commerce distribution company – another example of how industrial space has become in-demand during the last two quarters with the coronavirus crisis.

An office building in Simi Valley that was converted to a warehouse has been leased to an e-commerce distribution company – another example of how industrial space has become in-demand during the last two quarters with the coronavirus crisis.

Newmark Knight Frank announced in early August that it has negotiated the 211,715-square-foot lease with an undisclosed distribution company on behalf of the complex's owner and developer, Xebec Realty Partners.

A Simi Valley resident who contacted the Business Journal by email said that a city staffer had identified the tenant as Amazon.com Inc. during a neighborhood meeting, but the Business Journal was unable to confirm this with city officials by press time.

Amazon or another e-commerce company might occupy the facility by next month. The nearly 11-acre site at 1757 Tapo Canyon Road, which had been home to a long-vacant office building, now hosts a brand-new, class A industrial facility.

Amenities include 135-foot truck courts, secured fencing, 27 dock-high positions, three ground-level loading doors, 32-foot minimum clear heights and abundant parking with immediate access to the 118 freeway.

NKF's Senior Managing Director Patrick DuRoss, Executive Managing Director John DeGrinis and Senior Managing Director Jeff Abraham represented Xebec.

"It's an interesting concept that I don't know many have contemplated in years past: replacing an office building with an industrial building," DuRoss said in a statement. "Two years ago, there was an existing 185,000-square-foot office building that had been vacant for several years, so we decided to approach the site from a different angle. In this case, it made a lot of sense because of the underlying industrial zoning, the condition of the existing office building and the supply/demand nature of industrial versus office in this particular location."

Added DeGrinis: "This transaction is particularly rewarding because we collectively thought 'outside the box' and came up with a solution that will result in significant job creation in the city of Simi Valley, particularly during this unprecedented time that has brought on so much uncertainty."

Xebec Realty Chief Operating Officer Gretchen Kendrick said the deal represents "an exciting opportunity" to repurpose the lot and deliver a high-quality facility in a region demanding new industrial space.

"We anticipate this building and new lease will not only provide a foundation for economic expansion in the region but will also support the growth of the global supply chain as the demand for e-commerce continues,"; Kendrick said.

The North Los Angeles region has been awash in Amazon leases of late. Other big warehouse deals closed by the Seattle-based e-commerce giant in 2020 includes Amazon's lease for 700,000 square feet at the upcoming Avion Burbank complex and two more deals in Santa Clarita Valley reportedly by Amazon totaling more than 252,000 square feet.

According to an NKF report, the Southern California industrial market continues to perform well amid market turmoil due to several notable drivers, including a large consumer base and retailers expediting their last-mile delivery capabilities, and big tenants who are increasing domestic inventory capacities. L.A.'s five submarkets, including North Los Angeles, account for 54 percent of Southern California's entire industrial inventory. The L.A. North region comprises 12 percent of that inventory, with 230 million square feet of industrial feet and a low 2.2 percent vacancy rate.

Team DeGrinis and Xebec have a long history together – this Simi Valley lease marks the eighth transaction that NKF has executed on behalf of Xebec, according to Abraham.

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