The median price of a new and previously owned homes has dipped for Los Angeles County. The year over year change is -10.5%. This can turn out to be a leading indicator for the industrial real estate market as residential price and sale declines can ripple through the local economy. Only time will tell.
Contessa Premium Foods offered a VIP sneak peek of its Green Cuisine Plant, the world’s first and largest environmentally responsible, LEED-certified frozen food manufacturing plant. The City of Commerce will rename the street where the plant is “Contessa Drive.”This is the first time the United States Green Building Council (USGBC) has awarded LEED (Leadership in Energy and Environmental Design) certification to a frozen-food manufacturing facility. The LEED rating system is the national standard for design, construction, and operation of green buildings. It recognizes five areas of environmental and human health: sustainable site development, water savings, energy efficiency, indoor environmental quality, and selection of materials. Located in Los Angeles CA, the new plant is a 4 million-cubic-foot facility, costing more than $35 million, that will produce up to 150 million pounds of product the first year alone. The facility, its processes, and the product manufactured there will be known as Green Cuisine.
In November, California led the nation in total exports ($12.8 billion) using the Bureau of Economic Analysis’ (BEA) U.S. Principal Parties of Interest (USPPI) series. Texas had the second highest total export value for the month ($11.7 billion). Year-over-year, California’s total exports increased by +9.7% while Texas’ total exports increased by +5.9%. In the area of manufactured exports, Texas edged out California with $9.6 billion versus $9.0 billion (year-over-year increases of +5.0% and +9.7% respectively). Year-to-date (YTD), total California exports increased by +7.6% (to $117.7 billion) compared with the first eleven months of 2006.
The California Employment Development Department (EDD) released December unemployment estimates last week. Seasonally adjusted, the Los Angeles County unemployment rate was 5.6%, up from 5.3% in November, from 5.1% in October, and from 4.5% a year earlier. December was the seventh consecutive month that the County’s unemployment rate increased over the previous year.
The Southern California industrial market continues to generate superlatives — highest rents, lowest vacancies, most construction, greatest absorption — but 2008 looks to a see if not an actual slowdown at least a tapering off in the rate of growth.
One forecaster states “It’s a time to catch our breath and prepare for the next wave. Most industrial developers are welcoming the slowing. The pace has been almost too fast. All this money has been pouring in, and sales and lease activity has been unbelievable. I think most people agree we need a break to catch our breath and assess what the next steps should be. Demand remains solid on both the sales and leasing ends. Cap rates are holding. Rents are holding. It’s more a question of slowing acceleration than deceleration.”
If there is any serious concern about the region’s future, it lies in the possibility of a downturn at the ports of Los Angeles and Long Beach, which account for 40% of U.S. imports.