Novelis – Oswego, New York
This plant shutdown caught my attention. The Novelis Plant in Oswego, New York supplies 40% of the aluminum for the U.S. auto industry.
This plant shutdown caught my attention. The Novelis Plant in Oswego, New York supplies 40% of the aluminum for the U.S. auto industry.
For decades, the U.S. industrial real estate landscape was largely shaped by the flow of consumer goods. e-commerce, brick-and-mortar supply chains, and manufacturer distribution networks. This model is not going away and will be enhanced by more e-commerce. However, a profound shift is now underway. New trade dynamics, tax incentives; and support for AI and Data Centers will re-orient location and capital decisions. There is a new emphasis on factors crucial for enhanced industrial production. This evolution leads to richer set of criteria for assessing location value with an emphasis on network dynamics, supply chain and underlying AI infrastructure.
For companies that are facing real estate decisions, we found the following framework helps you determine the type of move you are most likely to take. The first three type of decisions are accepted as standard procedures in corporate real estate circles. Infrastructure demands, particularly power, connectivity, and location have grown to being singly important.
1. Incremental Growth: Remaining close to core operations and seeking nearby buildings to facilitates organic expansion or infill needs. This strategy prioritizes maintaining local expertise and established networks. Incremental growth is the most common way to expand. Value is based on proximity.
2. Standardization: Particularly relevant for companies taking multiple facilities to support regional markets or industries. This approach emphasizes consistent specifications and operational efficiency across a distributed network.Common examples are consumer products, industrial supply, and data centers.
3. Value-Based: Driven by new strategic directions or significant restructuring, this often involves a “Pick Up and Move” to a fundamentally different area, chosen for its long-term alignment with core values and future growth. This frequently occurs when companies leave California for lower costs, fewer regulations or improved synergies with suppliers and customers
4. Infrastructure Dependent: The largest expenditure of industrial development is data centers. Hyperscalers are dependent on huge amounts of power and connectivity on relatively large parcels of heavy industrial land, almost anywhere. Edge data centers are smaller and located in urban centers to serve autonomous vehicles, consumer, shopping, delivery and nearby industrial and commercial facilities.
To support our clients, we developed these strategies over 45 years. We have custom analytics, self-developed maps and personal relationships across North America and Europe. Our diagnostics pinpoint the buildings that are right for you. Please contact us with your questions and comments.
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204 W. 131st St, Los Angeles, CA, 90061
Industrial Building for Lease – Now Available
For More Information Please Contact:
Jim Klein, SIOR
(310) 451 – 8121
jimklein@kleincom.com
All information has been obtained from reliable sources, however Property Owner and Broker make no representations as to the information’s accuracy. All tenants and buyers to independently investigate and verify all matters pertaining to the property including but not limited to zoning, physical details, environmental, improvements and any other conditions that affect the Tenant’s or Buyer’s use and occupancy of the property.
Please select a valid formMore Uncertainty in a Soft Market
As an industrial real estate broker in Los Angeles, we make a living by hustle and personal relationships. Despite our effort, when you step back to analyze, it is the macro influences that are the determinant factors. The Great Financial Crisis drove down interest rates and brought in a wave of institutional investors that purchased almost every available property. These property owners received an additional boost during the Covid period that created a surge of imports and warehouse shortages that increased rents. The economic result was inflation and to combat higher prices, the Fed increased interest rates. This action resulted in reduced investor activity because deals no longer made sense. Now we are facing a Tariff Tantrum that is freezing tenant demand. A few months’ pause in activity wouldn’t be bad except many owners are leveraged and need to service their debt. Each macro event has an unintended consequence on pricing and vacancy.
Los Angeles industrial is particularly dependent on goods coming through San Pedro Bay. During Covid, when there were 100 ships waiting to be unloaded, it created a beneficial rent surge for property owners. Today, with a 70% decrease in port traffic, rents are declining. While obvious in buildings, the clearest example is Industrial Outside Storage (IOS), basically truck yards, which has seen a drop of more than 50%. IOS was the darling of large investors and served as a new property class. However, many of those truck yards remain vacant and were underwritten at much higher rents.
Another source of demand, particularly here in the South Bay, comes from aircraft and defense companies. Its origin in WWII has ebbed and flowed between war and peace. I had one client who made aircraft fasteners and during times of peace, they would store their machinery and lease out the buildings. But during the Korean, Vietnam, and Cold War periods, they would bring out that same machinery and start manufacturing. We are at another similar period with a different breed of defense companies financed by venture capital and not by prime contractors. It’s a growing industry but also hampered by not getting the parts they need from foreign countries. We are also seeing Chinese companies exploring the creation of a manufacturing base in the U.S. with their advanced manufacturing equipment.
You could say it’s the revenge of the private property owner. During the boom period of low interest rates, competition prevented private owners from affordably purchasing property except through investment vehicles with larger funds. Today, private and long-time owners with a low basis can cut their rents and because of Proposition 13, also have low property taxes. For private owners, they merely need to cover their lifestyle while they wait for better times. Large, newly created funds are faced with valuation cuts that can put them out of business. It’s an unpleasant decision to make, but cutting rents is the way to lease buildings until conditions improve. There are simply too many buildings for lease. Long-time property owners have a clear advantage in today’s market until market conditions change. After all, it’s a cycle.
(The Rent and Vacancy charts are supplied by Moody’s Analytics and are based on their data research and forecast methods. However, they do not account for market sentiment based on current tariff conditions and potential of negotiations. Until trade dynamics become more certain, the current sentiment is unfavorable especially for property owners and tenant’s dependent on import and export activity)
14458 S Avalon Blvd, Gardena, CA 90248
Available Now
PDF Flyer || AIRCRE Flyer || Site Plan
For More Information Please Contact:
Jim Klein, SIOR
(310) 451 – 8121
jimklein@kleincom.com
All information has been obtained from reliable sources, however Property Owner and Broker make no representations as to the information’s accuracy. All tenants and buyers to independently investigate and verify all matters pertaining to the property including but not limited to zoning, physical details, environmental, improvements and any other conditions that affect the Tenant’s or Buyer’s use and occupancy of the property.
The industrial real estate landscape in Los Angeles stands at a critical inflection point following the implementation of significant tariffs by the Trump administration in early 2025. With Chinese goods now effectively subject to tariffs exceeding 54% and China’s reciprocal 34% tariffs on US imports, the traditional trade flows that have long defined the Los Angeles industrial market are undergoing substantial transformation.
This report examines the emerging opportunities in Los Angeles industrial real estate created by this new tariff environment. While short-term disruptions are inevitable, the combination of reshoring initiatives, supply chain restructuring, and development constraints creates a potentially favorable environment for strategic industrial assets in the region.
The Los Angeles industrial real estate market entered this period of tariff-induced change with the following key metrics:
Source: Cushman & Wakefield Los Angeles Industrial Market Report, Q4 2024
Source: JLL Industrial Market Outlook, Q1 2025
Chart shows the effective cost increase of Chinese imports after tariffs (base 100 = pre-tariff cost)
Map shows relative opportunity levels across Los Angeles industrial regions based on tariff impacts and market conditions
The map above illustrates the key industrial regions of Los Angeles County and adjacent areas, highlighting the relative opportunity levels based on our analysis of tariff impacts and market conditions. Regions like Commerce/Vernon show particularly high opportunity potential for cold storage facilities, while the South Bay area presents strong opportunities for last-mile distribution facilities.
Relative opportunity potential based on market analysis
The intersection of tariff impacts and market conditions creates several distinct opportunity areas in the Los Angeles industrial real estate market:
Timeline showing opportunity levels and key factors across different time horizons
Properties with superior access to transportation networks, population centers, and skilled labor will outperform regardless of short-term market fluctuations.
Industrial properties that can accommodate multiple use cases will maintain value through market transitions.
Track major companies announcing US manufacturing investments to identify potential tenant demand patterns.
The temporary disruption in port volumes may create buying opportunities for well-located assets at attractive valuations.
The recent tariff implementations have created a complex but potentially opportunistic environment for Los Angeles industrial real estate. While short-term disruptions are inevitable, the combination of reshoring initiatives, supply chain restructuring, and development constraints creates a potentially favorable environment for strategic industrial assets.
The Los Angeles industrial market’s fundamental strengths—its strategic location, robust transportation infrastructure, and access to one of the largest consumer markets in the country—will continue to support its long-term viability despite the current trade policy shifts.
Despite higher than normal industrial vacancies, Hard Tech companies are finding it difficult to locate adequate industrial space. Many Hard Tech companies require substantial electical power. They want a free-standing building for U.S. Government clearance, more office space than is typical, a large parking area, and a location to attract engineers. Many Hard Tech companies prefer El Segundo and neighboring beach communities because of its history of aerospace and defense manufacturing. But they will consider other locatons along the 405 corridor from LAX to Irvine, including Torrance, Long Beach and other locations in Orange County. Some Hard Tech Companies will make the difficult decision to split their manufacturing from engineering to find the right facility in the location they want. Other parts of Los Angeles that served as machining centers in the past are located in Gardena/Carson, Commerce/Vernon and parts of the San Fernando Valley. Following are a couple of graphs describing market conditions:
Offerings are scarce in the El Segundo/Beach Cities area. When Hard Tech companies grow, they often look to Torrance, Hawthorne, Gardena, Carson or Long Beach. These cities are close to experienced engineers and they house good production facilities.
Power is a main criteria for many Hard Tech Companies. If you need heavy power, 2000 AMPs or greater, there are only a few buildings with the necessary capacity in each square foot range.
Rents hover between $1.50 to $2.25 Gross per square foot per month depending on location and amenities.
If you are seeking a new building or have questions about Los Angeles industrial real estate, please contact us today.
Thank you,
Jim Klein, SIOR – Jimklein@kleincom.com
Quan Wu – Quan@kleincom.com
In North Santa Monica, where I reside, we are the lucky ones. Destruction from the fires is just over the ridge. We can walk down the staircase on Adelaide, pass Canyon Elementary, climb back up Rustic Canyon, and be in the center of the burn area in a 15-minute hike. It’s smoky, many residents have left the streets to quiet. Face masks are common and the color of the sky is a tinge of orange. Threats of more wind are in the offing. Today, large convoys of police cars and fire trucks, 15 or 20 in a group, are traveling up the 405 with flashing lights to pre-position.
When we evacuated on the first night, we came to the New Gardena Hotel. It’s Japanese-owned and managed with high standards and a good breakfast. It’s in the center of the Gardena restaurant row with noodles, seafood, Japanese, Korean, and Vietnamese delicacies across the street at Pacific Square and Tozai Plaza. I saw a customer at the hotel who did the same as us, to be near his business. His house was destroyed.
Today is President’s Trump inauguration day in Washington D.C. It will bring a new era of governing. The administrative state will be top of the agenda. If you’ve dealt with local planning agencies and the mounds of restrictions from Green Zone Ordinances, buffer zones, AB 98, Environmental Justice, and other anti-industrial building measures, you can see how far astray local leaders have gone by neglecting basic municipal services. The other initiatives I’ll be watching will be AI, Crypto, and Super Intelligence. These are new agencies headed by talented and experienced executives with histories of founding tech companies. And limited Regulation!
AI is the transforming technology of a generation. Already, AI chat applications provide learning, automation, and useful outputs that merit continual dialog with your AI pal. At our office, we are preparing for the AI future by cleaning our data (parcel records, salesforce, available, and specialty niches) so it can be read by machines. We geolocate each property and create a unique link to build and show relationships. We focus on local properties, especially those that are potential transactions. We follow certain industries and share techniques with colleagues in different markets.
Crypto is a step to the future. An increase in the value of coins and an embrace of crypto by key finance legislators will bring wider acceptance and knowledge. We experimented by building a blockchain on Hyperledger, but we didn’t have enough transactions to justify the instance cost. Now, we are using IPFS, a public decentralized blockchain where cost is low. In Los Angeles, because many properties trade off-market, in quiet transactions, or under new Buyer regulations, there is a blockchain use case to order and provide certainty. Blockchain is helpful when Sellers want to be discrete. You need not trade crypto coins or speculate to use blockchains. Please look for further explanation of how we use IPFS with customary brokerage procedures
In Los Angeles, industrial real estate has gone from frothy to flat. Rents are in decline, sale prices are down, and to the consternation of many sellers, investors have a “large margin of safety” when they make an offer. There is a wide variety of buildings available, especially for warehouse and distribution. One segment of shortage is modern, free-standing, and secure industrial buildings that can meet government clearance. Power and parking are needed for tech-industrial. Multi-tenant units, too, are in short supply.
We create analytics and compare buildings based on attributes and location. Clients can understand the real estate markets by scrolling over and seeing the metadata for each property. We create graphs for tenants, owners, and investors. Originally coded for Streamlit, we migrated to a SQL database and then to Postgres so we could capture location data. We’ll be able to solve some nagging problems with this next revision. Organizing market data in this, or other ways, is a necessary step for adopting new standards.
Our staff has grown to eight people split between sales and administration. We have a 45-year history in South Bay industrial real estate and an office in Gardena for most of that time. We live on deals. Please contact us if we can help with your next industrial deal. In Los Angeles, or anywhere in the U.S.