With an industrial base of over 1 billion square feet , the Los Angeles industrial market is one of the largest in the United States. It also has some of the highest asking rental rates, $0.95 per square foot, as well as one of the lowest vacancy rates (2.4%) in the nation. In recent quarters, net absorption has been soft, mainly due to lack of available inventory. Imports at the twin ports of Los Angeles and Long Beach, which handle roughly 40% of all imports into the country, continue to be a major industrial driver for the region. In addition, the region is the largest manufacturing center in the United States. For perspective, LA has more manufacturing jobs than the entire state of Illinois . Consequently, demand is still very strong. Although developers are attempting to keep pace with demand, they are not able to do so because of the scarcity of buildable land. Total warehouse square feet under construction fell from 5.4 MSF in 2018 to just 4.7 MSF in 2019. Investors love the potential for rent growth and low vacancy in tight markets and they have been aggressively securing deals with a willingness to accept lower returns for the stability and upside potential of the Los Angeles market. Approximately $3.80 billion worth of industrial real estate traded hands in Los Angeles in 2019, setting a new high water mark for the region.
According to a recent Los Angeles Times article, Los Angeles County was the largest county by output, with its $710.9 billion GDP accounting for 3.8% of the U.S. total. L.A. County added $395.2 billion to total U.S. GDP from 2001 to 2018.
This is good news for industrial real estate values!
Below is a chart showing the average sale price per square foot of industrial building area sold over the last 12 years in the Central Los Angeles industrial submarket. The $/SF dips on the left side due to the Great Recession and then continues its upward march to over $200/SF in 2019.
The data includes industrial zoned properties which include warehouses and manufacturing buildings with a small fraction converted to creative uses in the DTLA Arts District. The majority represent typical industrial uses around DTLA and Vernon and Commerce and Montebello. The data below are only an average as prices can vary greatly depending on building features and location.
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We have a 9,000 square foot brick warehouse building available for lease. Located in between Frogtown and Glassell Park near Silverlake, Highland Park, and Downtown Los Angeles (DTLA).
This new listing will attract art studios, set designers, or general contractors for the entertainment industry as it has great natural interior lighting with 3 ground level loading doors into a wrap-around yard with fenced parking.
On the major street of San Fernando Road near the 2 and 110 freeways. The property is currently occupied by a group of artists. The building once housed a storage annex for the famous artist Michael Kelley. Download below brochure for more information.
Whether a commercial real estate purchase or lease agreement, many industrial buyers/sellers and landlords/tenants choose arbitration and thus waive their rights to have the dispute litigated in a court or jury trial. Many believe arbitration saves time and money in the dispute resolution. However, in recent years a new avenue of dispute resolution has grown in use: judicial reference. However, this option has not been incorporation into the AIRCRE standard purchase contract or lease agreement yet. It would have to be added to the addendum. See below excerpt from a law firm for more insight.
Comparing the overall comparative benefits however, judicial reference has a few significant advantages over arbitration. For one, while arbitration is – except in very limited cases of egregious instances of fraud or arbitrator misconduct – binding on the parties, while judicial reference affords the parties complete appellate rights. That right of appeal, tied to the referee’s obligation to follow the rules of evidence (as opposed to an arbitrator’s limited obligation to do the same and the arbitrator’s proclivity to consider almost any evidence presented at the arbitration) renders a judicial reference a more secure and predictable dispute resolution option than arbitration. These factors alone may warrant the inclusion of a judicial reference clause as the alternative dispute provision in a contract of any consequence.
The only clear disadvantage to a judicial referee compared to an arbitration proceeding is that judicial reference proceedings must be public, while arbitration is usually a private affair, taking place at a private facility not open to the public with and, oftentimes, with no public record. Arbitration awards, even if confirmed by the Superior Court, are much more likely to be sealed and kept private which is often an important consideration in employment or intellectual property disputes.from Cohen Durrett LLP.