Watson's Carson Industrial Park Already Pre-Leased.

How hot is the South Bay industrial market?

New space seems to be getting gobbled up as soon as it's built. In fact, every square foot of the second, and latest, phase of Watson Land Co.'s Dominguez Technology Center in Carson has been preleased.

The $30 million project consists of three buildings encompassing 450,000 square feet, which were completed at the end of January.

The largest of the three leases Watson just signed - valued at more than $10 million - is with Kintetsu Intermodal. The importer/exporter of high-end electronics signed a 10-year deal for a 171,000-square-foot building.

Then Circle International Group, a global provider of transportation and logistics services, signed a five-year lease valued at more than $5 million for a 161,000-square-foot building.

And there's even an e-commerce company in the mix - one of the first such major commitments in the South Bay. HomeGrocer.com signed a 10-year lease for a 116,000-square-foot warehouse-distribution building, the Kirkland, Wash.-based e-grocer's second L.A. County location.

HomeGrocer plans to customize the Carson building with automated conveyor belt systems and special refrigeration units before it begins operating from the site later this spring. About 200 new jobs will be created at the facility.

"We do expect more (e-commerce tenants)," said Kirk Johnson, Watson's vice president of marketing and leasing.

The technology center's "Legacy Buildings" - which provide flexible warehouse space with fiber optics - are well suited for tenants such as HomeGrocer, he said.

"We designed into our specs features that are different from a generic development," Johnson said. "We decided to build a better box with certain building features."

These include more skylights, a lower building-to-land ratio and more room for movement of large tracks. The buildings can be used for office and industrial uses, or assembly and light manufacturing. They can be single story, with 30-foot clear heights, or two stories.

"We're building very flexible, and we'll see what kinds of uses the market demands," Johnson said. "The buildings are first class from aesthetics and functionality. The response has been wonderful."

Johnson said there seems to be a lot of interest in office buildouts, rather than just warehouse uses. "Logistics firms are aggregating more functions into their buildings," he said.

The Technology Center is one of the largest master-planned business centers in the county, spreading across 438 acres. Watson planned to break ground last week on another 650,000 square feet of spec space, about $50 million worth of development. More than half will be in the technology center and the balance in the Watson Corporate Center, which fronts the San Diego (405) Freeway in Carson, Johnson said.

That construction will still leave 90 acres left for development in the technology center and 15 acres in the other park. Johnson said the buildings that broke ground last week should be ready for occupancy in September and then they will "see where the market is." If the company pre-leases a certain percentage, it will likely proceed with more spec development.

"We already have proposals on some of the 650,000 square feet," Johnson said.

The South Bay's industrial vacancy rate is only 3.59 percent and rents have hit 53 cents a square foot per month, a historical high.

Watson Land owns and manages more than 10.6 million square feet of industrial, office and tech space, mostly in Carson. Its entire portfolio is 99 percent leased, Johnson said.

Watson's three major business centers in Carson are part of a foreign trade zone, a designation that affords a number of cost-saving incentives to importers, exporters and manufacturers, including the ability to delay or lower tariffs and waive duties on merchandise.

Bret Sidney and Bret Quinlan of Cushman & Wakefield were the brokers on the Circle lease, while Bob Goodmanson and Brad Bierbaum of CB Richard Ellis represented HomeGrocer.