Owner-Users have historically paid a premium in Orange County, but e-commerce is changing the game
Historically, owner-users have always paid a premium to obtain desired space in the Orange County market, but in recent years, this trend has began to flip.
November 20, 2019
- Historically, owner-users have always paid a premium to obtain desired space in the Orange County market, but in recent years, this trend has began to flip. Because owner-users tend to be tied to the area as they are likely to be local businesses and are more reluctant to move, they have historically paid more than investors.
- However, as the tremendous growth in e-commerce and logistics and SoCal’s prime location (near the Ports of Los Angeles and Long Beach as well as high density populations) attract investors from all around the world and with the markets 3 percent vacancy, investors are thirsty for any space they can get their hands – and money – on.
- In the last three years, investors have paid, on average, $9 more per square foot than owner-users. In the years prior, owner-users were paying $16 more on average. Moreover, 50 percent of investment activity in the last three years has been concentrated in North County, bordering Los Angeles County. Investors have not missed a beat and they are eating up any price increases in order to acquire their desired space.
Source: JLL Research