Small Projects Yield Firm Big Profits, Los Angeles Business Journal March 2008

Los Angeles Business Journal

March 10, 2008

Seventh Street Development knows its way around small industrial developments.

The Long Beach-based firm specializes in industrial space for small to medium size users. Even the company’s largest project, the forthcoming Valley-71 Business Park, will only have about 408,000 square feet of space.

Some other projects, like the Speedway Business Park in Irwindale or the Lanzit Industrial Park in Los Angles, have less than 200,000 square feet.

Even in an industrial market that includes mammoth, 1 million-square-foot buildings, sometimes less is more.

“We like to focus on what we call infill sites and by nature we have focused exclusively on Southern California,” said Seventh Street Development principal Craig Furniss. “And the type of sites you are going to get here are smaller. It’s driven us into this niche.”

Furniss and principal Doug Hinchliffe worked at real estate services company Lowe Enterprises before starting Seventh Street in 2003. Hinchliffe said that while at Lowe, he and his partners identified an opening in the market.

“We felt there was an opportunity particularly in L.A. for second-and third-generation development,” Hinchliffe said. “The sites are usually smaller so it dictates we deal in projects that are smaller.”

In Irwindale, the company built a four-building, 84,000-square-foot industrial project on five acres. The project was completed in spring 2006 and was sold out by early 2007.

Another Seventh Street project, Mission-71 Business Park, is a 292,000-square-foot Pomona development.

The project, completed in December, is on a portion of General Dynamics’ former ordinance plant.

Alliance Commercial partners purchased the property in 2004 and sold a portion of it to Seventh Street, which eventually plans to build another phase of buildings there. The average size of the 11 buildings is just 20,000 square feet. So far, the company has leased one building and sold another.

The partners said that the firm is capable of taking on larger projects, but the smaller, infill opportunities keep coming.

By: Daniel Miller

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LABJ Best Small Developer, March 10, 2008

Posted March 10, 2008 by jcowan in News