by Jodi Summers
“Industrial space looks to be the leader,” offered Jerry Nickelsburg, a senior economist at the UCLA Anderson School of Management, contend. “We’re seeing warehouses that were leased, but not fully utilized now fully utilized.”
There’s a flurry of activity in the marketplace around Los Angeles ….it’s palpable. Asking rates for industrial properties have gone up since the last quarter, rising 0.5% to $8.74 per square foot. Loopnet notes that asking lease rates for industrial properties reached a three-year high in January 2008 at $10.85 per square foot. In comparison, the median asking price is now 4.7% lower.
Higher rents, lower purchase price < sexy opportunity.
In the metro Los Angeles area, industrial sale prices are up by 2.3%. The highest median sale price during the past three years was $144.72, set in April 2009. In comparison, the current median sale price is down by 25.7%. However, the current price is 3.3% higher than the three-year-low of $104.06, which was set in January 2011.
With our population, ports, strengthening infrastructure and logistics expertise, industrial demand will stay strong in California for years to come. As you know, that’s already happening. In recent months, the Inland Empire has captured nearly 40% of all U.S. industrial absorption. Strong demand has pushed vacancy rates into the 7% range in San Bernardino and Riverside counties. And the area is seeing signs of rental growth and speculative development.
As you know, the Inland Empire was whonked upside its economy in the recession. If the Inland Empire can strike back, there’s hope for cities around the country. Los Angeles is one of the best business cities with the most to offer, just watch us come back from the precipice and thrive as one of the most significant industrial economies in the country.
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 – or 310.392.1211, and let us move forward together.