SOCAL INDUSTRIAL REAL ESTATE SNAPSHOT – APRIL 2012 > THEY SAY WE’VE GOT IT GOOD

March 30, 2012 on 7:38 pm | In Charts + Statistics, Economy, Market Snapshot, Trends, Uncategorized | 2 Comments

by Jodi Summers

Demand from logistics companies should always keep Los Angeles industrial real estate strong. The ports of Los Angeles and Long Beach make up the third-largest port complex in the world, and SoCal is a significant distribution center.  Between port and airport warehousing, as well as the Alameda Corridor intermodal freight-rail expressway connecting the ports to the transcontinental railroads just east of L.A.’s downtown, logistics is outpacing aerospace and other manufacturing as one of the leading occupiers of industrial property.

So many good things are being said, and yet industrial asking prices are scuttling along the bottom. If you look at Metro Los Angeles asking prices, they are currently @ a very affordable $131.67, down -0.9% from three months prior, and down -5.7% from the same time last year. County prices averaged $131.31 down -4.7% from the year previous. According to Loopnet.com, asking prices for industrial properties have fallen to a new three-year low.

And here’s why now’s the time. If you look @ Industrial Property Sale Prices for Metro L.A., the median sale price per square foot has fallen 0.2% in the past two months. Compared to last quarter, industrial properties have seen a 0.1% decline, to $108.50, for its average sale price per square foot…this is an immediate current value as sale prices have seen a 3.7% increase for the previous 12 months. The highest median sale price over the past three years was $147.50, which was set in March 2009. In comparison, the current median sale price is down by 26.4% – 4.3% above the lowest price of the past three years, which was set in January 2011.

Los Angeles County is ranked as the number-one manufacturing center in the United States, according to a recent report from the Los Angeles County Economic Development Corporation Kyser Center for Economic Research. Our region now boasts almost 930 million square feet of rentable industrial building area. If our prices are low, can you imagine how the rest of the country is doing?

Rents in Metro L.A. are currently showing an average asking lease rate was $8.68 per square foot annually. This shows a drop of 1.1% year-over-year and a decline of 0.2% from the end of the fourth quarter of 2011. Lease rates for industrial properties hit a three-year peak in January 2008 at $10.85 per square foot. The current median asking lease rate is 5.3% lower.

Nationwide, industrial production has gained 4.0% since February 2011. This should lead to an uptick in prices in second quarter.

We’re here to help you with your commercial and investment property needs. Please contact Jodi Summers and the SoCal Investment Real Estate Group @ Sotheby’s International Realty – jodi@jodisummers.com or 310.392.1211, and let us move forward together.

 

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http://urbanland.uli.org/Articles/2012/Jan/MalcolmLA

http://laedc.org/eedge/index.html#2

http://www.federalreserve.gov/releases/g17/current/g17.pdf

http://www.bls.gov/news.release/pdf/ppi.pdf

http://www.costar.com/News/Article/Dont-Look-Now-but-Investor-Interest-Reviving-In-Warehouses/136850?ref=/News/Article/Dont-Look-Now-but-Investor-Interest-Reviving-In-Warehouses/136850&src=rss

http://urbanland.uli.org/Articles/2012/Jan/MalcolmLA

http://www.loopnet.com/Los-Angeles_California_Market-Trends

http://www.socalindustrialrealestateblog.com/?p=1193

http://mikelong.hubpages.com/hub/The-Global-Affects-of-the-ShippingLogistics-Revolution

http://www.aaenvironment.com/LongBeachPort.htm

 

2 Comments »

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  1. So we’re port sexy?

    Comment by KenLan — March 30, 2012 #

  2. The City of Redondo Beach has launched a request for qualifications for a waterfront development opportunity covering more than 15 acres of oceanfront land. The RFQ is a major milestone in the City’s comprehensive Waterfront Revitalization Project, which includes targeted upgrades of public and private spaces across the waterfront, stretching from Redondo’s pier to King Harbor.

    The redevelopment will include 150,000 square feet of existing building area, with up to 400,000 square feet of net new development led by those chosen from the RFQ responses. The land is fully entitled through the coastal commission.

    Comment by CarRos — July 6, 2012 #

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