Average Asking Lease Rates have climbed dramatically in the last several years with the largest increases in 2021 and 2022. See below chart showing the steep rise for warehouse asking rental rates in Los Angeles, Orange, Ventura and the Inland Empire per AIRCRE MLS data. These are the major industrial property markets in Southern California. Individual markets and submarkets vary along with building class quality.
Rare opportunity in the tight Southern California industrial real estate market to acquire an investment property with a long term lease with an established tenant.
This industrial building was leased on November 1, 2021 to a food production company for 10 years on a triple net NNN basis. Rent is $455,000 per year with annual increases of 3%. The company was established in 1994 and has grown since then into a few larger buildings ending up in this facility.
The building was originally constructed in 1971 and then remodeled in 2006 as a food production facility. Food improvements include refrigeration (coolers and freezers), floor drains, clarifier, food grade walls, hoods in commercial kitchen as in commissary, boiler, test lab, and other improvements to qualify for USDA and Organic food safety certifications.
Building square footage is approximately 31,326 and land square footage is 49,960 on industrial zoned land. Located near the major Los Angeles ports and LAX.
The AIR CRE is the premier multiple listing service for industrial real estate such as warehouses and manufacturing buildings in Southern California. Whether you are a buyer or tenant or landlord or seller, this MLS is the service that all the top-tier brokers primarily use. It services industrial, office, retail, and other commercial real estate listings.
There are over 33,000 listings in the system for SoCal. And there are over 1,600 members in SoCal. So if you seek to search or list for sale or lease a warehouse or other commercial property in Los Angeles, Orange, San Bernardino, Riverside or Ventura counties, contact us as we are members of this MLS.
LoopNet, which is owned by Costar, is a second-tier MLS that we also use but it’s data pales in comparison to the AIR CRE and top firms mainly use it as a secondary marketing tool but don’t always put their listings there. The most active and major Los Angeles commercial real estate brokers use the AIR CRE, which is member owned and created in 1960.
Supported by the phenomenal growth of e-commerce, leasing activity was strong in the first quarter after the steep declines experienced earlier in early 2020. In Q1, across the Central Market, 139 leases were signed for a total of 2,836,295 SF; the average asking rate was $0.96 PSF. Q1 leasing volume for Central LA was 25% higher than Q1 2020 levels. Another 133 warehouse properties, totaling 2,000,000 SF, were sold in the period with an average price of $291.43 PSF. The average rate will move up or down slightly quarter-to-quarter depending on how many older, functionally obsolete warehouse and manufacturing buildings are in the pool of available inventory. The limited amount of available first-generation, Class A space leases at a premium to the average rate.
The L.A. County industrial neighborhood of City Terrace has seen increased buyer and investor activity in the past few years. Not only have several properties sold in this up and coming area, but a new 200,000 square foot industrial building is under construction by a well known developer.
The heightened interest in this once sleepy area may be due to it’s proximity to the Arts District, Boyle Heights, and Lincoln Heights, and also between Cal State University L.A. and the USC Keck School of Medicine. Nearby a Biotech/Bioscience campus is being built with heavy interest from prospective tenants. These are exciting developments for one of the oldest industrial tracks in L.A.
A new opportunity is a 106,141 square foot land parcel with 40,000 square feet of old manufacturing buildings on it. This site is being offered for sale at land value. Allowed uses in this M2 zone are manufacturing, distribution, trucking, cannabis, and a variety of other industrial and commercial uses. One advantage of operating a business in unincorporated county lands is that there is no gross receipts revenue tax as there exists in the City of Los Angeles.
Contact us regarding this property.