Daiso Inks Lease at Former American Apparel Distribution Center

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Daiso Inks Lease at Former American Apparel Distribution Center
Daiso California is taking over American Apparel’s former worldwide distribution center

Daiso California is taking over American Apparel’s former worldwide distribution center, a 220,000-square-foot warehouse in La Mirada owned by Prologis Inc.

The division of Japanese home goods retailer Daiso Industries Co. Ltd. last month signed a six-year lease for the space at 16400 Trojan Way, said Prologis’ broker, Christopher Sheehan of Colliers International. The deal is worth roughly $12 million, he said.

American Apparel’s lease was set to expire in July, but Prologis negotiated to cut that term 1 ½ months early after the downtown-based clothing manufacturer filed for bankruptcy in November. A liquidation company is in the process of removing American Apparel’s material-handling systems, racks, and conveyor belts from the La Mirada warehouse, Sheehan said.

Sheehan, assisted on the deal by Nicolas Vranka and Connor Reeves, said the space sat on the market for a couple of months before Daiso landed the deal – a short turnaround fueled by high demand in the southeast Los Angeles County submarket known as Mid-Counties, where the vacancy rate is below 1 percent.

“Tenants have to move quickly when they see a property they like, because it likely won’t be available for long, and they’ll be competing with other potential tenants,” Sheehan said. “Market rents for both Class A and Class B have surpassed all-time market highs. … It’s a landlord’s market.”

Southeast L.A. County is particularly attractive for tenants looking for proximity to other parts of Southern California, Sheehan added.

“They can hit the whole Southern California population base within a two-hour drive,” he said.

Cushman & Wakefield’s Mike Foley, Chuck Berger, Ryan Bos, and Dave Hess represented Daiso in the deal, but declined to comment. According to Daiso’s website, the brand operates 36 shops in Southern California, where it sells low-priced household goods such as spatulas, wrapping paper, and gardening shears. Its Japanese footprint spans 2,680 stores and it has more than 4,000 globally.

San Francisco-based Prologis is one of the world’s largest industrial real estate owners with 678 million square feet worldwide, according to its website. That includes 31 million square feet across 254 buildings in Los Angeles and Orange counties.

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