Curbing Industrial Development

A new law has taken effect aimed at curbing where warehouses and other industrial sites can go up in California, the nation’s largest market for such space. The law is controversial and could have a far-ranging impact on industrial real estate investment nationally. Also for today: Another Manhattan office building is selling to an owner-occupier.

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— Tom Acitelli, Deputy Editor

California’s AB 98 Poised to Regulate the State’s Runaway Industrial Sector

A new law in California is set to significantly alter one of the state’s most incredible, if controversial, economic drivers by restricting where and how industrial development can be built in the Golden State. But much like an 18-wheeler that’s lost its brakes on Interstate 10, the end result could get a little messy. Assembly Bill 98, approved by the California State Legislature in late August and signed into law by Gov. Gavin Newsom in September, is a response to the vast surge of warehouse development throughout the state and its accompanying baggage, like noise, traffic and diesel emissions. The law attempts to push new industrial development away from more populated areas by requiring that projects be built on major roads rather than residential streets, and introducing stringent regulations on large projects near “sensitive receptors” such as homes, hospitals, day cares and schools. The issue is top of mind in Southern California’s Inland Empire — the country’s largest market for warehousing and logistics, serving the world’s biggest companies and logistics firms with thousands of low-rise properties that range up to 1 million square feet or more — which was put into hyperdrive amid the COVID-19 pandemic.

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Morgan Stanley Selling 2 Park Avenue to Haddad Brands for $360M

Morgan Stanley is selling its 28-story office building at 2 Park Avenue for roughly $360 million to a children’s clothing manufacturer, Commercial Observer has learned. Haddad Brands is the buyer and will also occupy the 1 million-square-foot building’s office space, sources close to the transaction told CO. Newmark’s Adam Spies, Adam Doneger, Doug Harmon, Willis Robbins, Joshua King and Marcella Fasulo negotiated the sale on behalf of the seller, sources said. The deal is expected to close by year end. Haddad Brands is led by CEO Sam Haddad. The privately held family business has over 90 years of experience in apparel and accessories, creating designs for household names such as Nike, Converse, Ralph Lauren and Jordan, according to its website.

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