OC Industrial Specialists Look to the Southwest for Deals
E-commerce is changing everything in the industrial sector, and Orange County players are poised to take advantage of the shift, especially by pursuing deals in Southwestern markets.
Premier Design + Build Group VP Steven Gabbert tells us the continuous rise in e-commerce has changed the industrial landscape for logistics companies and distribution centers. He says today's end user is a more sophisticated tenant who requires adaptable warehouse space with more clear height and Class-A amenities.
Premier, which is HQ'd in suburban Chicago, recently tapped Steven, based in its Irvine office, to expand the company's footprint in the Southwest, especially in California, Nevada and Arizona, all of which include hot industrial markets. Steven says his firm is well-positioned to deliver much-needed product in these expanding markets.
There are opportunities in for industrial value-adds as well. BKM Capital Partners, an Irvine-based company that focuses on value-add, multi-tenant industrial assets, recently completed 29 leases totaling nearly 200k SF in three of its Las Vegas industrial properties. "Our assets are located in the Airport, Southwest and North Las Vegas submarkets," BKM director of asset management Matthew Stephenson (here with son Charley) tells us, "and we've seen significant leasing demand feeding off of the Strip (gaming-related and convention services companies), as well as health and beauty supply-oriented companies."
Matthew also says there's general growth in the economy that's triggering demand. “When we acquired these assets in 2014, the industrial vacancy rate was about 11%. At the time, we recognized the potential in the market, and anticipated that vacancy would tighten rapidly.” And so it has: vacancy is now about 6.9%. Matthew adds that BKM is currently raising a $200M to $300M fund through which the firm will invest in multi-tenant industrial assets in Western US metros. Pictured: one of BKM's Vegas assets, the Cheyenne Technology Center.