3 Important Industrial Insights
|We asked C&W EVP Jim Dieter, who’s an expert in pretty much every major industrial property market in the country, how SoCal stacks up these days compared to other markets. All together, the 1.7B SF SoCal market—OC, the Inland Empire, and LA County—is the largest in North America at 1.7B SF, topping even metro Chicago (1.2B SF).|
1) SoCal has historically not only been the largest but also the most active in leasing, Jim says, leading the rest of the country. That’s still the case, as the region leads the nation with over 18M SF leased at the halfway mark of 2012. Also, the region has the lowest vacancy rate (4.6%) among Tier 1 markets nationwide—and the lowest the rate has been since 2009.
|2) Demand for space is active in the region and with vacancy rates being low, we’re seeing positive increases in rental rates and even robust spec construction. This shows confidence in the overall marketplace by developers, owners, and lenders.3) SoCal has always been the first megamarket to show negative fundamentals, as well as the first to show positive fundamentals and lead the nation out of a down market. That’s because of its size but also because of its location near an enormous population base, its proximity to the largest seaport in North America, and the ample supply of distribution space that can accommodate growth as demand increases.|