Covington Group, a Dallas-based industrial developer, bought a vacant 77-acre site in the northern L.A. County city of Palmdale for $6 million.
The deal closed last month, and the seller has remained undisclosed.
A representative for Covington did not immediately respond to questions about the deal, but the firm plans to build an industrial warehouse larger of 1 million square feet or more on spec, according to the broker who represented the seller.
“Everybody felt it was a win-win — I could tell you that the buyer is happy, the seller is happy, the city’s happy, I’m happy,” said Mike Radlovic of Coldwell Banker.
Covington, along with its Dallas headquarters, has offices in Las Vegas and Akron, Ohio and focuses on investments and developments of warehouses, manufacturing facilities and other industrial sites in Texas, Ohio, California and South Carolina.
The Palmdale deal was part of a recent flurry of Southern California acquisitions. In October, Covington bought the Southern California Logistics Center, a seven building, 3.4-million-square-foot site in Victorville, for $252 million. At the time that deal ranked as the priciest of the year for the Inland Empire. The same month Covington also closed on Saugus Station, a 70-acre, 24-building industrial complex in Santa Clarita, for an undisclosed price.
Covington’s Palmdale site is located at 400 West Avenue M, less than a mile east of State Route 14 and west of the Palmdale Regional Airport. The vacant property is also across the road from a city courthouse and near a site where a roughly 1 million-square-foot warehouse is planned for Amazon.
It’s the kind of commercial site that’s becoming increasingly valuable: In recent months the industrial market in parts of Southern California has been soaring, as higher prices and limited inventory have also pushed major players farther away from urban centers.
“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.”
Indeed, some municipal leaders have pushed back against industrial operators — last month, Amazon stopped work on a San Francisco warehouse after that city’s Board of Supervisors passed a moratorium on new delivery centers, and in SoCal, amid a pushback from labor and environmental groups, the retail giant also recently pulled out of a plan to build a delivery hub in West Covina.