Bravo to us! California rates 6th on the list of the states with the fastest growing economies. Countrywide, gross domestic product (GDP) grew by 2.5% in 2012 after growing 1.6% in 2011. This is the most the economy has grown since 2006. Bravo to us! Nationally, manufacturing, trade and the finance and insurance industry made some of the biggest contributions to growth.
California, has been one of the most depressed economies in the country for years, has seen growth in its telecom, tech, financial markets and banks. But life is getting easier. Here is an update on our progress courtesy of 24/7 Wall St….
> GDP growth: 3.5% (tied for 5th highest)
> Real 2012 GDP: $1.75 trillion (the largest)
> 1-yr. population change: 0.95% (18th highest)
> 1-yr. employment growth: 1.99% (7th highest)
California has the largest economy of any state in the nation, at $1.75 trillion in 2012. The state also was among the most damaged by the housing crisis during the Great Recession. In 2009, California’s economy contracted more than 5%, and grew only 0.3% and 1.2% in 2010 and 2011, respectively. According to the Federal Housing Finance Agency, as of the first quarter of 2013, home prices in the state were down by more than 16% in the past five years, compared to 9% for the nation overall. While still high, California’s unemployment rate has declined in recent years, from 12.4% in 2010 to 10.5% in 2012. Also, through a mixture of tax hikes and spending cuts, California recently recorded a budget surplus. Just three years earlier, the state had faced a deficit of nearly $60 billion.
North Dakota wins the 2012 award with > GDP growth: 13.4%.
Read more: States with the Fastest Growing Economies – 24/7 Wall St. http://247wallst.com/2013/06/12/states-with-the-fastest-growing-economies/#ixzz2WCl6TxRK
We be growing…2012 estimates from the Los Angeles Economic Development Corporation reveal that California surpassed Italy to become the eighth largest economy in the world. Locally Los Angeles County remained in 21st place behind Saudi Arabia and Switzerland, and ahead of Norway, Iran, Sweden, Belgium and Poland.
Our economy is growing and so is the interest in SoCal warehousing. Demand is anticipated to outpace supply through 2014 and rents finally beginning to rise again, notes CoStar.com As the local warehouse market has been sliding since mid-2008, commercial real estate investors are increasingly interested in placing capital in the warehouse sector.
Very little new warehouse space is being delivered in Los Angeles. Current Los Angeles market trends data indicates an increase of +0.6% in the median asking price per sq ft for Industrial properties compared to 4Q 2012, with a decrease of 0.6% compared to last year’s prices. Loopnet observes that county-wide, asking prices for Industrial properties are 0.4% higher – at $131 per square foot – compared to the current median price of $138 per sq ft for Industrial properties in Los Angeles, CA.
Los Angeles County has nearly 10 million residents, spread out over 4,752.32 square miles, We are the most populous county in the nation, and larger in population than 42 states. L.A. is one of the original counties, created when California became a state in 1850. The county has 88 cities, of which the city of Los Angeles is the largest, followed by Long Beach, Glendale, and Santa Clarita.
Los Angeles County entered 2013 with momentum from a county labor market that accelerated during the second half of 2012. Nearly all of the major private sector industries added jobs in 2012, paring nearly two percentage points off our hefty unemployment rate.
The California seasonally adjusted unemployment rate was 9.0% in April 2013, 9.4% in March 2013, and 10.7% a year ago in April 2012. The comparable estimates for the nation were 7.5% in April 2013, 7.6% in March 2013, and 8.1% a year ago.
International trade continues to play an important role in the local economy. The San Pedro Bay ports of Los Angeles and Long Beach are the two largest container ports in the nation. Much of the nation’s imported consumer goods from Asia and the Pacific Rim enter the United States through the twin ports. While the number of TEUs (twenty-foot equivalent units) moving through the ports edged up by 0.9% from 2011 to 2012, the value of two-way trade through the Los Angeles Customs District, a broader measure of trade volume, rose by 4.3% last year to a record $403.4 billion. Two-way trade should increase by 3.0% this year, and accelerate to a 4.9% growth rate in 2014 as prospects improve for the U.S. and its trading partners.
The industrial property rental market is reacting well to all this good news. The average asking rental rate per sq ft/year for Industrial properties in LA as of March 2013 was $123.39. This represents an increase of 1.6% compared to the prior 3 months, with an increase of +4.6% year-over-year. County-wide, average rental rates in Los Angeles are +0.8% higher at $105.06 per sq ft/year for Industrial properties currently for lease. Demand is translating into quick occupancy gains and a deepening, widening recovery.
should eclipse the 10 million mark by 2014 and employment should approach four million. They say it may be 2015 or 2016 before nonfarm employment exceeds the peak of 4.12 million reached in 2007.
With money and good flowing, lease rates on the rise, the future is promising for industrial properties. Manufacturing is growing and job expansion in transportation and utilities are outpacing all service-related sectors. Movement of goods measured in truck tonnage is doing well, while intermodal rail traffic was up 5% in the first 13 weeks of 2013 compared to the same period last year.
Growth is predicted for the Los Angeles industrial real estate market. If you want to get in the game, the value is now.
For more information please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – email@example.com or 310.392.1211, and let us move forward together.
California is an example of green construction. In 2008, state energy regulators adopted a long-term plan that called for having all new residential buildings achieve zero net energy use by 2020 and having all commercial buildings achieve zero net energy use by 2030. The provisions also reduce water use by 20% and divert 50% of construction waste from landfills.
L.A. is on track to reduce the city’s carbon emissions 35% below 1990 levels by 2030. Our goal is the greatest reduction target of any large US city. It takes the state’s stringent CalGreen building codes a step further.
So going forward, we’re good, but we’re still dealing with an existing building stock, and some antiquated customs and equipment all the way around. Restructuring a structure’s infrastructure (say that 3x fast) is not an overnight process. We are sprinting toward net zero construction, yet large parts of the old-style building infrastructure will still dominate the landscape for the next century.
Any improvements and renovations made to your properties can impact the environment. Be conscious of your choices in paint and floor coverings. Anything you upgrade on your properties can be done with green in mind heating, plumbing, and electric all offer green fixes that can save the business money on the long term, and increase profitability on resale.
But some things are a slow fix…we may be building green buildings, but the machinery used to construct the property may not be. You’ve seen those backhoes and cranes bellowing black diesel carbon fumes. Around the shop, some old power tools use 3x the needed energy.
Construction equipment companies are catching on. JCB is aware of their duty to make their plant machinery more environmentally sound. For example, the Scot JCB Digger has numerous variations including the brand new 3CX-ECO with increased fuel efficiency in all aspects of its functionality.
Construction companies – particularly in Southern California – are up to speed on CalGreen construction, ICC codes, and other modern methods. Our fair county is an example of sound building, with cities like West Hollywood, Los Angeles, and Santa Monica offering some of the strictest green construction codes in the country, if not the world. And we’re setting an example for going forward. Today’s green apprentice may someday become the foremen of their own company, selling jobs and their bids.
Green building goes beyond the edifice, it includes the source of the raw materials, and the distance they travelled, the equipment that goes into the building and that goes into building the building. Society is progressing forward at warp speed, and we’re along for the ride. Let’s do our best to contribute to the greater good for now and for generations to come.
There is more money being invest in industrial real estate infrastructure. CMA CGM, the world’s third-largest container shipping line, has purchased a stake in the Port of Long Beach’s Pier J. This move is reputed bring an additional 2.6 million container units to the Port and increase Port revenues by about $70 million over the next five years. These benefits will pass through to warehousing and industrial real estate.
The association marks CMA CGM’s first investment in a port on the West Coast of North America and t makes the Marseille, France-based ocean carrier a partner in the lease and operations of the 256-acre terminal. The company’s ships will call exclusively at the Port of Long Beach when using the San Pedro Bay gateway.
“This first new investment for our Group on the U.S. West Coast will reinforce our position in North America,” said Farid Salem, CMA CGM Group Executive Officer. “It demonstrates CMA CGM’s strong involvement to develop transport infrastructure and to improve quality of service to our customers. By investing in Pier J, the Group ensures that the largest vessels deployed in the trans-Pacific trade will be efficiently managed.”
For the Port, it represents a major vote of confidence in Long Beach’s future.
“Of the large carriers, CMA was the only one that did not have a home locally. We are glad they’ve decided to call Long Beach home,” said J. Christopher Lytle, Port of Long Beach Executive Director. “This agreement validates the investments we are making in our facilities. We are committed to remaining the gateway of choice for trans-Pacific trade.”
The Green Port Policy, adopted in 2005, serves as a guide for decision making and established a framework for environmentally friendly Port operations. This aggressive 10-year, $4.5 billion capital improvement program that includes upgrades to terminals, rail facilities and overall infrastructure.
Pier J is home to Pacific Container Terminal. With a water depth of about 50 feet and 17 post-Panamax gantry cranes, A “Post-Panamax” crane can fully load and unload containers from a container ship too large (too wide) to pass through the Panama Canal (normally about 18 containers wide). This slew of equipment makes the Port of Long Beach one of the few terminals in the world capable of servicing the new generation of giant container ships.
Port PR notes that the Pacific Container Terminal has been operated as a joint venture between global maritime services company SSA Marine and COSCO, a China-based ocean carrier. CMA CGM became a partner in the venture in November and officially announced the agreement on December 11.
CMA CGM operates a fleet of 395 vessels calling at 400 ports around the world, on every continent and in 150 countries. Their vessels have been calling at the Port for many years, but the new arrangement gives the shipping line a West Coast homeport and strengthens the bond with Long Beach. CMA CGM also calls at Long Beach’s Pier A.
The Port of Long Beach is one of the world’s premier seaports, a primary gateway for trans-Pacific trade and a trailblazer in innovative goods movement, safety and environmental stewardship. A major economic engine for the region, the Port handles more than six million container units a year and trade valued at more than $155 billion that supports hundreds of thousands of Southern California jobs.
Enjoy this enlightening video about how iron ore, an important global commodity, has become a promising new export at the Port of Long Beach.
by Jodi Summers
“What we’re trying to do is design the best building for the market.” Notes Panattoni Development partner Mark Payne.
The growth of Internet sales is creating a need for more warehousing. As you might expect, Los Angeles area industrial buyers place their priority on location. There is a desire for industrial sites near LAX, the Ports, UPS and FedEx stations. Taking a broader view, beyond local infill, there will be a demand for more distant locations where next-day delivery products can get shipped quickly and easily.
New development is going forward because experts praise the SoCal industrial real estate market as “by far the deepest and largest industrial market in the nation, with LA and Orange counties having the lowest and second-lowest vacancy rates at 2.4% 3.8%.”
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