Jodi Summers = Industrial Real Estate

LOS ANGELES INDUSTRIAL REAL ESTATE SNAPSHOT ~ JANUARY 2013 ~ THE NEW YEAR IS GOING TO BE GOOD

December 30, 2012 on 2:01 pm | In Bravo, Charts + Statistics, Economy, Fascinating Information, Investment Opportunities, Market Snapshot, New Developments, Trends, Uncategorized | 3 Comments

by Jodi Summers

Happy New Year’s! 2013 is going to be a prosperous year for Los Angeles Industrial Real Estate. Our market is off the bottom and climbing. It will be happy year. If you want to buy or sell industrial properties in Los Angeles, now is the time – {Contact us @ (310) 392-1211 – we can facilitate your transaction.} There is very little inventory in the LAX-area market. Buyers are sifting through limited inventory – Increased demand, limited supply – both sale prices and lease rates are on the rise.

SoCal is known for being 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% and 3.8%, respectively according to CBRE. (Btw, the Inland Empire ranks ninth-lowest at 6.3%.) Low vacancy rates mean inventories are sparse, declining 16.9% over the last year in the Los Angeles Metro Area.

Prices are way down too…the average asking price for industrial properties in the metro area is approximately $131.39 per square foot, down 2.9% from the previous year, calculates Loopnet. Asking prices for industrial properties reached a three-year high in February 2008 at $198.40 per square foot. The three-year low was $131.09 in May 2012. We are rising off the bottom…and prices are rising. The median sale price per square foot for industrial properties in the metro area climbed 5.7% in the second half of 2012.

Savvy owner-users are buying into the sometimes pricy Westside industrial market thanks to Small Business Administration loans. The SBA had its largest volume of financing ever in fiscal 2012. (FYI – SBA financing is available up to 200,000 square feet.) Watch for increased strength in the owner-user market in 2013.

Sale prices per square foot for industrial properties end the year at around $112.56, a 5.2% rise from a year ago, and 8.2% higher than the three-year-low set in January 2011. The highest recent median sale price was $127.91, set in October 2009.

There’s been no spec development for a couple of years – Sellers, if you’ve got an older industrial property, now is a good time to sell it to a new user. Hunky new properties will be coming on the market, now that speculative industrial development is ramping up.

“We’re tracking 16 million square feet of true spec development within our region,” calculates CBRE senior managing director Kurt Strasmann. “The Inland Empire accounts for almost 9 million square feet.”

On the leasing end, asking rents for industrial properties end the year @ around $8.81 per square foot, a rise of 0.8% on the year. Lease rates for industrial properties reached a three-year high in January 2008 at $10.85 per square foot. The lowest asking lease rate in the past three years was seen in January 2012 at $8.67. Time on the market is 150 days.

The National Association of Realtors offers a positive nationwide outlook. Their reports find that the areas with the lowest industrial vacancy rates currently are Orange County,  CA, with a vacancy rate of 4.3%; Los Angeles – 4.4%; and Miami at 6.5%.

Throughout the Country, industrial vacancy rates should decline from 10.1% in 4Q 2012 to 9.5% in 4Q 2013. NAR reasons that annual industrial rents rose 1.7% in 2012 and will climb 2.2% next year. Net absorption of industrial space nationally will probably total 93.4 million square feet this year and 89.6 million in 2013.

As for the strength of our market, let’s conclude with the stats of CBRE senior managing director Kurt Strasmann.  “The best indicator is that we’re tracking 16 million square feet of true spec development within our region, of which the Inland Empire accounts for almost 9 million square feet.”

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

http://www.bisnow.com/

http://www.socalindustrialrealestateblog.com/?p=1590

http://www.realtor.org/news-releases/2012/10/commercial-real-estate-vacancies-slowly-declining-rents-rising

http://www.scribd.com/fullscreen/116742486?access_key=key-1on4f9dkq5d9bz8mcjb9

http://2013-wallpapers.blogspot.com/2012/07/happy-new-year-wallpapers-2013.html

http://dc.streetsblog.org/wp-content/uploads/2011/07/Cognition-Blog-New-York-Construction-Workers.jpg

http://new.usgbc.org/sites/default/files/imagecache/fixed_670-308/construction.jpg

http://www.industrialrealestate.net/images/34.jpg