Southern California Slowing Acceleration

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.

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