02Feb

The Industrial Market Report for the San Gabriel Valley Submarket of Los Angeles in the Fourth Quarter of 2023.

During the fourth quarter of 2023, the San Gabriel Valley Industrial Submarket of Los Angeles experienced a continuation of the trend where available space increased once again, marking a significant factor in the local industrial real estate landscape. This rise in available space suggests potential shifts in market dynamics, such as increased supply or adjustments in tenant demand, influencing the overall vacancy rates in the submarket. 

The submarket faced a minor setback in terms of average rents, which decreased by $0.07 to $1.56 NNN (Triple Net Lease). This decrease may be attributed to the delicate balance between supply and demand, tenant negotiations, and broader economic factors that impact the pricing dynamics of industrial properties in the San Gabriel Valley. 

Within the Pomona Industrial Market, warehouse buildings in the fourth quarter of 2023 had an average sale price of $308.76 per square foot (PSF). This figure provides valuable insights into the local market's pricing dynamics, reflecting the perceived value of industrial properties in Pomona during that specific quarter. 

In the neighboring City of Industry, the average sale price per square foot for warehouse buildings stood higher at $351.68. This higher price point suggests that the City of Industry maintained a premium position within the San Gabriel Valley, potentially due to factors such as strategic location, specialized facilities, or a higher level of demand in that specific submarket. 

Looking at the San Gabriel Valley Industrial Market as a whole, the average sale price settled at $304.52 PSF during Q4 of 2023. This comprehensive figure encompasses the performance of various submarkets within the San Gabriel Valley, highlighting the overall pricing trend for industrial properties across the region. 

In summary, the fourth quarter of 2023 witnessed an increase in available space in the San Gabriel Valley Industrial Submarket, coupled with a slight decrease in average rents. The variations in average sale prices across specific markets, such as Pomona and the City of Industry, add complexity to the overall real estate landscape. Stakeholders and investors may find value in analyzing these trends to make informed decisions in response to the evolving dynamics of the San Gabriel Valley's industrial real estate market.

29Jan

The Industrial Real Estate market report for Orange County in the 4th quarter of 2023.

The industrial real estate landscape in Orange County has experienced a notable shift in the fourth quarter of 2023, marked by a noticeable impact on rental dynamics. The moderation in tenant demand has contributed to a increase in vacancy rates during this period thereby leading to a deceleration in rent growth. This shift in market dynamics has implications for both property owners and tenants, shaping the overall economic landscape of the region. 

One of the noteworthy industrial real estate transactions during Q4 of 2023 was the acquisition of 7050 Village Drive in Buena Park, CA, by Buchanan Street Partners. This move underscores the strategic investment decisions being made in response to the evolving market conditions. Additionally, Home & Body Co.'s leasing of 5800 Skylab Road in Huntington Beach, CA, reflects ongoing activity with industrial real estate warehouse buildings, albeit with a focus on leasing arrangements. 

Analyzing specific areas with Orange County warehouse and industrial properties, the sales prices have exhibited distinct trends. Huntington Beach, for instance, has seen an average price of $380.00 per square foot (PSF) over the past year. This figure provides valuable insights into the relative strength of the market in this particular locale. In comparison, Garden Grove has experienced a slightly lower average sale price at $320.00 PSF, indicating variations in the pricing dynamics across different parts of the county. 

Furthermore, lease rates with Orange County industrial properties averaged $1.58 per square foot during the fourth quarter of 2023. This figure serves as a benchmark for property owners and tenants alike, offering a glimpse into the prevailing economic conditions shaping leasing negotiations. The asking lease rates provide crucial information for businesses seeking commercial spaces, influencing decisions on location and affordability. 

In summary, the industrial real estate landscape in the Orange County market is adapting to changing demand patterns, with notable transactions and pricing trends providing valuable insights for industry stakeholders. As the market navigates through these shifts, strategic decision-making and a nuanced understanding of local dynamics will continue to be key elements for success in the region's real estate sector.

23Jan

The 4th quarter of 2023 Los Angeles - Long Industrial Real Estate Market Report.

1. Vacancy Rate Increase in South Bay Industrial Market: 

  • The South Bay Industrial market has experienced a year-over-year increase of 250 basis points in vacancy rates, reaching 3.9%.
  • This uptick suggests a change in the demand and supply dynamics within the industrial sector of the South Bay.

 2. Sublease Transactions in Industrial Leasing: 

  • Out of the 87 industrial lease transactions in the 4th quarter, 17.2% were sublease transactions.
  • The prevalence of subleases in the industrial sector underscores a strategic approach by tenants, potentially driven by the need to optimize existing space or adjust to evolving operational requirements.

 3. Tenant Responses to Scarcity in Industrial Spaces: 

  • Faced with continued scarcity, many industrial tenants in the South Bay have chosen to renew existing leases or implement efficiency measures within their current space.
  • This strategic response has contributed to a cooling effect on the market, leading to a 3.2% year-over-year decrease in industrial lease rates.

 4. Larger Decline in Industrial Lease Rates for Direct Spaces: 

  • The industrial lease rates for direct spaces have seen a larger quarter-over-quarter decline of 11.25%.
  • This pronounced decrease indicates heightened competition and negotiation dynamics in the industrial leasing market, likely influenced by increased vacancy rates and tenant strategies.

 5. Landlord Concessions in Industrial Leasing: 

  • The decline in industrial lease rates and the competitive landscape have prompted landlords to make some concessions to facilitate deals.
  • Concessions may include adjustments in terms, incentives, or other favorable arrangements to attract and retain industrial tenants.

 6. Industrial Sales Transactions: 

  • Industrial sales transactions have experienced a decline in the average number, dropping from a quarterly average of 20 to 13.
  • Additionally, both the average and median industrial asking sales prices have decreased quarter over quarter, reflecting a softening in the industrial sales market.

 7. South Bay Industrial Market Positioning: 

  • Despite the observed trends, the South Bay Industrial market remains 4.4% below the 20-year national average industrial vacancy rate.
  • The areas surrounding the port continue to be more optimal for most Industrial operations, indicating a sustained high demand in the foreseeable future.

 8. Additional Reports for Midcounties, Central (Los Angeles), and Inland Empire Industrial Markets: 

  • The report includes insights into the other industrial markets of Midcounties, Central (Los Angeles), and Inland Empire, providing a comprehensive view of the broader industrial landscape in the region.

In summary, the South Bay Industrial market is navigating through changes with increased vacancy rates, strategic tenant responses, and shifts in leasing and sales dynamics. Despite these trends, the market remains below the national average industrial vacancy rate, with certain areas, particularly around the port, expected to continue experiencing high demand. The inclusion of reports for other industrial markets enhances the overall understanding of the industrial real estate landscape in the region. If you have specific questions or would like to explore particular aspects further, feel free to let me know!

11Jan

Some of my recent commercial real estate transactions and available properties from the Pomona, Montclair & Upland California areas.

09Jan

The 20,400 SF site in Upland, California was leased, contact Ron Mgrublian for more information.

  • Paved and Fenced Yard
  • Light Industrial Uses
  • Water and Power
  • 1,964 SF Building
  • Close to 10 and 210 Freeways
04Jan

The ±4,000 SF Industrial Warehouse Property at 6309 Alondra Blvd, Paramount is now available for lease.

• ±4,000 SF part of a Larger Building

• Gated Secure High Image Business Park

• 3 Ground Level Doors

• 18’ Clear Height

• 2 Bathrooms

• Zoning: M-1

• 200 Amps Power

• Minutes to 91, 710, & 105 Freeways

16Nov

Ron Mgrublian – Lee & Associates Los Angeles | Long Beach will provide a complimentary valuation report for your commercial real estate property!

Provided it’s in the database, Ron Mgrublian – Lee & Associates will provide a free valuation report for your commercial real estate property. Even amidst the complexities of the current lending climate, it's important to note that the demand for Industrial Real Estate Properties remains remarkably high. This knowledge becomes particularly valuable for those individuals who have a remaining loan term of two years or less. 

Understanding the nuances of the market and its unwavering demand for industrial properties despite the challenging business & lending environment is pivotal. Ron Mgrublian and the adept professionals at Lee & Associates are here to offer their expertise, ensuring you receive valuable insight that is instrumental in making informed decisions about your commercial real estate property. Whether you're assessing your property's value for refinancing, selling, or strategic planning, these insights provide a valuable edge in navigating the dynamics of the commercial real estate market. 

To receive your report, please use the contact form, call, text or email me.

14Nov

The 3rd Quarter Report for GDP Growth, Employment, Monetary Policy & Global Economy is out.

The standout feature of the 3rd Quarter of 2023 was the unexpectedly rapid expansion of the Gross Domestic Product (GDP), outpacing earlier projections and reflecting robust economic performance. This accelerated growth trajectory defied initial forecasts, signaling a buoyant and thriving economy. 

Furthermore, the labor market exhibited remarkable resilience during this period, showcasing sustained employment figures and reinforcing the economy's underlying strength. This continuity in job creation and stability contributed significantly to the overall positive economic landscape. 

In a notable decision, the Federal Reserve opted against raising interest rates, a move indicative of their confidence in the current economic conditions. This decision aimed to sustain the momentum of growth and support ongoing economic recovery without implementing tighter monetary policies. 

Despite persistent world conflicts and geopolitical tensions, several facets of the global economy exhibited signs of improvement. This unexpected resilience and progress in various economic indicators underscored the capacity of certain regions and sectors to navigate challenges and thrive despite prevailing uncertainties. 

Collectively, these factors marked a dynamic and promising quarter for the economy, reflecting both resilience and unexpected vigor in the face of various domestic and international challenges.


27Oct

The 3rd quarter Industrial Real Estate Market report for Orange County.

The demand for industrial space from tenants in the third quarter showed a continuous decline, with the Orange County Industrial Market experiencing a negative net absorption of 848,736 square feet. This negative absorption is the most significant since the first quarter of 2019. Furthermore, it marks the third consecutive quarter of contraction, resulting in a total negative absorption of 1.8 million square feet for the year. Countywide, the vacancy rate increased by 40 basis points, reaching 3%, the highest it has been in the past 10 quarters. 

Despite these challenging trends, the average rent for industrial spaces has seen an 11% year-over-year increase. However, Lee & Associates' agents have observed a growing trend of landlords offering concessions on new lease agreements and lease renewals. This shift in landlord behavior suggests that they are becoming more attuned to the weakening demand in the market. 

While it may appear that leasing activity is on the decline, the industrial real estate market remains active. There is a notable presence of prospective buyer-users who remain undeterred by the rising interest rates. This indicates that even with the challenges posed by increased vacancies and negative net absorption, there is still considerable interest and activity in the market from those looking to purchase and utilize industrial spaces, especially in Orange County.

25Oct

The San Gabriel Valley Industrial Real Estate Market Report for the 3rd Quarter of 2023.

The industrial sector in the San Gabriel Valley continues to exhibit resilience and robustness, even in the face of a minor uptick in the vacancy rate, which now stands at 3.3%. This small increase in vacant industrial spaces has not had a significant adverse impact on the market. Rental prices have experienced only a slight dip since the previous quarter, currently averaging at an annual rate of $18.96 per square foot on a triple-net lease basis. 

Despite these minor fluctuations, construction activity in the San Gabriel Valley remains steady and thriving. A substantial 5.3 million square feet of new industrial developments are currently underway, illustrating the enduring demand for industrial properties in the region. 

However, it is essential to note that a moratorium in Pomona, California, affecting warehouses, trucking facilities, and other industrial-related uses, is poised to expire by the close of 2023. This pending expiration of the moratorium introduces an element of potential opportunity into the local industrial landscape. Both tenants and developers should keep a watchful eye on market dynamics and remain flexible in their strategies, ready to pivot to seize emerging opportunities in this ever-evolving industrial market in the San Gabriel Valley. 

In conclusion, the San Gabriel Valley's industrial sector is in a state of transition, with various factors in play, from the rise in vacancy rates to the imminent expiration of the Pomona moratorium. Adapting to these changes and staying well-informed about market shifts will be crucial for those involved in the industrial real estate market in this dynamic and resilient region.

24Oct

The 3rd quarter, 2023 Los Angeles - Long Beach Industrial Real Estate Market Report shows an uptick in vacancy.

A prevalent and unifying trend has emerged in the industrial markets of Greater Los Angeles & Long Beach, Orange County, and the Inland Empire during the third quarter of 2023: an uptick in vacancy rates. This development has undoubtedly captured the attention of real estate observers, raising questions about the resilience of these markets amidst evolving economic conditions.

While it's true that asking lease rates and sale prices have moderated from their previous peaks, they continue to hover at historically elevated levels. This is particularly noteworthy in the realm of leasing, where the prevailing rates are higher than what has been observed in the past. The apparent contrast between increased vacancies and persistent high asking rates creates an intriguing narrative within these markets.

The question that naturally arises is whether this shift in vacancy rates is a direct consequence of the recent Federal Reserve interest rate hikes or if it's a temporary slowdown in the market's momentum. The answer to this query remains somewhat elusive, and much like the economic outlook itself, it is subject to ongoing observation and analysis.

One plausible hypothesis is that the impact of the Federal Reserve's interest rate hikes has yet to fully materialize. These hikes may have prompted businesses and investors to reevaluate their strategies, potentially leading to a pause in leasing and purchasing activities. The full ramifications of such monetary policy decisions often take time to ripple through the real estate sector.

On the other hand, it is equally plausible that the observed increase in vacancy rates is a transient phenomenon. Industrial markets are influenced by a myriad of factors, including supply and demand dynamics, economic cycles, and regional conditions. Short-term fluctuations are not uncommon, and they may not necessarily indicate a fundamental shift in the health of these markets.

As we move forward, close monitoring and analysis of these markets will be essential to provide a more definitive answer. Factors such as employment trends, trade activity, and consumer behavior will play a pivotal role in shaping the trajectory of these industrial markets. Whether the current situation is a harbinger of sustained change or a brief pause in the continued growth of these markets will be revealed in the coming quarters, offering valuable insights into the ever-evolving real estate landscape.

05Oct

Just listed, a ±20,400 SF Fenced and Paved Yard yard with an ±1,964 SF building at 1910 Huntington Dr in Upland, CA

  • Paved and Fenced Yard
  • Light Industrial Uses
  • Water and Power
  • ±1,964 SF Building
  • Close to 10 and 210 Freeways