The Central Los Angeles industrial real estate market encompasses approximately 300 million square feet of building area. This market includes the well-known submarkets: City of Vernon, City of Commerce, and Downtown Los Angeles. It should be noted that the following areas on the periphery to Downtown are also included in the Central LA market: Lincoln Heights, Glassell Park, City Terrace, East L.A., Boyle Heights, South Industrial, and the Goodyear Tract. In the Central LA submarket buyer and tenant demand remains strong compared to outlying markets. In fact, the Central submarket remains the tightest metropolitan industrial market in the nation. This submarket is an infill market and very little new construction occurs on empty industrial land (with almost no construction on other types of commercial real estate such as retail and office). The Central LA market is also the largest industrial real estate submarket in Los Angeles County.
Category Archives: Market Trends & Indicators
Market trends, leading or lagging indicators. As it relates to industrial property.
Warehousing Proximity to Ports of Los Angeles & Long Beach
There is an unrelenting desire by warehouse users to occupy properties within close proximity to Los Angeles’ ports – where 40 percent of all containerized cargo enters the United States. Vacancy rates remain historically low in the Southern California Industrial Real Estate market, however, a flattening of cargo activity at the local Los Angeles and Long Beach ports may spell a warning for the area’s outlook in 2008. The fact remains, though, that the two ports ranked first in the nation for container activity in 2006, placing 5th in the world. In the above aerial photo, industrial parcels are outlined in green.
Mixed Bag for SoCal Economy
Southern California’s economy continues to slow as the housing downturn has been full swing for a few quarters. However, the following industries have been growth drivers: retail trade, transportation, warehousing and logistics, administrative and support, leisure and hospitality, and professional, scientific and technical services. Even with falling single-family home prices, tighter mortgage underwriting standards, and increasing residential notices of default and foreclosures, the industrial real estate markets continue to remain stable in sales prices and rental rates. Though industrial economics remain flat, transactions numbers and absorption values are half the numbers from a year ago.
Redevelopment Boundary Moved South in Arts District
The Los Angeles City Council last week approved a plan to expand the southern boundary of the Arts District, paving the way for redevelopment of the industrial area between 6th and 7th Streets just west of the river. This area includes a scattering of modern warehouses amongst mostly older and sometimes multistory brick warehouses built in the 30’s and 40’s. New residential grown in the current industrial area is expected. Councilman Huizar proposed the modification to the former boundary set by the Planning Commission and CRA.
Employment Steady with Slight Downtrend
The California Employment Development Department (EDD) released January unemployment estimates last week. Seasonally adjusted, the Los Angeles County unemployment rate was 5.7%, up from 5.4% in December, from 5.3% in November, and from 4.7% a year earlier. January was the eighth consecutive month that the County’s unemployment rate increased over the previous year. Last month’s County unemployment rate was the highest since February 2005 (5.7%). Historically speaking, 5.7% is not high and poses no immediate threat to the industrial real estate market.