Snapshots

Los Angeles industrial sales see 12% price increase, year-over-year

The Central submarket saw the largest amount of growth (66.36%) in five years.

May 01, 2019
  • The Central submarket saw the largest amount of growth (66.36%) in five years.  With such limited space and a large supply of older, obsolete product, many developers are looking to tear down the less desirable product and redevelop high quality class A buildings on these sites.
  • With foreign investors continuing to turn to industrial real estate, Southern California saw the greatest increase in growth.  2018 investment nearly tripled from 2017, dominated by investment from China and Canada.  As trade concerns continue to strain foreign relations, the Los Angeles industrial market is largely unaffected. 
  • With E-commerce serving as the main demand driver for warehouse and distribution in LA, many investors are looking to cash in on the high rents tenants are paying as the market is heavily landlord favorable.  There is no shortage of tenants who want to be located close to the ports and the dense LA consumer base, giving landlords the upper hand when negotiating lease terms.
  • With prices climbing to such unprecedented values, users are often turned away form purchasing out of fear of a bad investment.  However, as vacancy rates continue to shrink and available land is quickly swallowed up at staggering prices, there appears to be no slowdown on  the horizon and sale prices will only increase.  While this may turn more users away from purchasing property in the LA market, it will likely draw in more investors and have existing users questioning the best use of their property.

Source: JLL Research, CoStar

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