Industrial market to see more than 65 million square feet of lease rollover in the next three years
The South Bay will see the most lease rollover out of any of the Los Angeles submarkets accounting for just over a third of all expiring leases.
August 28, 2019
- The South Bay will see the most lease rollover out of any of the Los Angeles submarkets accounting for just over a third of all expiring leases. More than half of the leases in the South Bay were signed in the last four years, and tenants renewing five-year leases will likely face sticker shock.
- Class A and B facilities comprise 75% of all expiring leases in the next three years and tenants who are unable to renew but wish to stay in LA will have to join a competitive market that is running out of space for new Class A and B industrial space.
- The San Gabriel Valley is home to the largest average expiring lease size at 75,000 sf. With far fewer blocks of space 50k square feet and larger than there were five years ago, tenants looking for the same amount of space or larger will likely have to turn to the Inland Empire to fulfill their distribution needs. Moving further east may actually provide some relief to tenants who don’t necessarily need to be located close to the dense Los Angeles population, as they will likely find more flexible lease terms in the Inland Empire.
- If the economic market remains strong and consumer demand for e-commerce and same-day delivery holds, there should be no stagnation in leasing in the LA market. Although some of these expiring leases may result in vacancies, don’t expect the space to remain on the market for long.
Source: JLL Research