We have a $3 million dollar project near the 200-acre Goodyear Tract located at Slauson Avenue and Avalon Boulevard.It is one of the older manufacturing centers in Los Angeles. Pricing is roughly 30% lower than other properties along the 110 Corridor. Obsolescence and neighborhood factors are the biggest reasons that you can find rents in the mid-$.20’s and sale prices in the mid-$30’s.There are a lot of lessons here that can apply to other parts of Los Angeles where manufacturing is either disappearing or adapting.
One can tell by the proud facades that adorn many of these buildings that they once housed major industry. Today, it is still a vibrant business area although in a much different way. There are few major corporations left in the Goodyear tract, but usiness owners are more entrepreneurial and are represented by different nationalities. It is a bazaar of labor, products,and intelligence.
Manufacturing, where it exists, consists of small runs and product differentiation. Design and production are major ingredients for the fashion, furniture, printing, and used clothing industries. These buildings would be considered dysfunctional in most other parts of Los Angeles because they have low ceilings, poor maneuvering, and tight parking. But because the marginal utility is still greater than land value, and the buildings house some very basic sorting and manufacturing operations, it works. Added to the low per square foot cost and its proximity to Downtown Los Angeles, the Goodyear area plays a critical role in the Los Angeles economy.
In addition, many companies also receive economic benefits because much of the area has a Brownfield designation. It is located in a Federal Empowerment Zone and local companies have set up their own Business Improvement District (BID). Because space is tight in this market, trends indicate that many companies now located in the Goodyear tract will seek alternate locations to the south and east. As other parts of Los Angeles continue to suffer from the malaise in manufacturing, we expect many of the vacant buildings to be filled by these enterprising firms— but they will be looking for low prices. The Goodyear tract is a good example of how business evolves and how some see value where others see blight.