More than 75% of under construction industrial product in Los Angeles is redevelopment
With available land dwindling in Los Angeles, opportunity for redevelopment continues to grow
June 19, 2019
- With available land dwindling in Los Angeles, opportunity for redevelopment continues to grow. Excluding the Greater San Fernando Valley submarket, 98% of all industrial construction is on land had been previously developed. There are just three projects in the other four submarkets, each under 100,000 square feet, accounting for the two percent of construction on vacant land.
- As land prices continue to skyrocket, investors in Los Angeles are turning to old, obsolete Class B and Class C warehouses and industrial plants to tear down and build large Class A distribution centers that better utilize the space. Development in the Central submarket is entirely on redevelopment sites as the submarket consists of the oldest industrial inventory in Los Angeles.
- San Fernando Valley is the last frontier of available land for industrial development, however the further north you go into the valley, the further you are from the dense consumer base of the Westside and Downtown leading to higher transportation costs. The Center at Needham Ranch in Santa Clarita accounts for nearly two thirds of all construction on vacant land, totaling 870k square feet and is expected to deliver late 2019 or early 2020.
- More than 50% of all under construction product will deliver by the end of Q3 and as much as 80% could deliver by the end of the year.
Source: JLL Research, Google Earth