Megadeals still happening in squeezed LA industrial market

Vacancy rate stays at 1.4%, lowest in country

Los Angeles /
Jan.January 24, 2020 02:40 PM
L.A. has lowest industry vacancy rate in country (Credit: iStock)
L.A. has lowest industry vacancy rate in country (Credit: iStock)

There’s little space in L.A. for new industry, though that’s not preventing megadeals on both the leasing and sales front.

Industrial sales volume in Los Angeles County and neighboring Ventura County ticked up six percent in 2019 year-over-year to a record-setting $4.1 billion, according to a new report from commercial real estate brokerage Transwestern.

The high points include Atlas Capital Group buying the L.A. Times printing plant in Downtown LA in December from Harridge Development for $241.5 million, or $367 per square foot; and Rexford International snapping up the Pomona Distribution Center from Prologis for $87.8 million, or $117 per square foot.

Those deals are happening at a time when contractors are struggling to find space for all types of projects in Los Angeles.

At the end of 2019, L.A. and Ventura counties had a 1.4 percent vacancy rate for industrial, easily the lowest among the major U.S. industrial hubs. By contrast, the Chicago area vacancy rate keeps dropping – but it was 5.4 percent after the fourth quarter of 2019. The New Jersey industrial market is also getting tighter, but the vacancy rate there is still higher, at 3.5 percent.

L.A. and Ventura counties have about 838 million square feet of industrial space, according to the report, with a mere 5.9 million square feet – or .7 percent of total space – in the pipeline for new construction.

The glut has driven up the cost of new leasing deals, which has caused current tenants to stay put for longer, according to Michael Soto, a researcher at Transwestern. It’s a situation that, at this point, only a major economic change like a recession would alter, the researcher argued.

The largest L.A. and Ventura county fourth-quarter lease deal, per the report, was electronic parts distributor WESCO taking about 305,000 square feet in Santa Fe Springs. Coming in second was Amazon’s roughly 300,000-square-foot deal in Torrance, with the e-commerce goliath setting up shop 10 miles away from the Long Beach ports.


Related Articles

arrow_forward_ios
BLT Enterprises founder Bernard Huberman dies at 65
Bernard Huberman, who built a 3M-sf property portfolio, dies
Bernard Huberman, who built a 3M-sf property portfolio, dies
Rexford Industrial Realty Co-CEOs Howard Schwimmer and Michael S. Frankel (Rexford)
Korean makeup manufacturer inks 100K sf sublease
Korean makeup manufacturer inks 100K sf sublease
Rexford Industrial Co-CEOs Howard Schwimmer and Michael S. Frankel and Lief Labs CEO Adel Villalobos with a rendering of the project (Rexford, Lief Labs)
Dietary supplement maker expands warehouse space in Valencia
Dietary supplement maker expands warehouse space in Valencia
Elon Musk and 19640 Cajon Boulevard (Alere Property Group, Getty)
Tesla drives into San Bernardino with big warehouse deal
Tesla drives into San Bernardino with big warehouse deal
Development is accelerating since a brief slowdown brought on by the pandemic (Getty)
Demand for logistics space drives LA’s industrial boom
Demand for logistics space drives LA’s industrial boom
Stanley Point's Kevin Stanley and Bain Capital Real Estate's Andrew Terris with the property (Google Maps, Stanley, Bain)
Staley Point and Bain buy Torrance industrial facility for $34.5M
Staley Point and Bain buy Torrance industrial facility for $34.5M
Goodman Group CEO Gregory Goodman with renderings of the facility (Goodman, Relativity Space)
Goodman signs spaceflight startup to 1.3M-sf former Boeing site
Goodman signs spaceflight startup to 1.3M-sf former Boeing site
The Box Yard property and Rexford Industrial co-CEOs Howard Schwimmer and Michael Frankel (Box Yard LA. Rexford Industrial)
Rexford pays $94M for Arts District industrial park
Rexford pays $94M for Arts District industrial park
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...