Analytic tools are essential ways to address space shortages for Occupiers or Investors. The reasons are complicated but the traditional market no longer supplies enough quality space. Online listing services do not yield satisfying choices. More aggressive tools, that emulates your precise business strategy or market expertise are needed to find deals in the era of Space Scarcity. The surest way to make deals is to create them and data is an integral part. Understanding the market comes first before developing the tools to exploit it. For instance, this is the case that better data will help you purchase Big Industrial deals…
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For Los Angeles area companies, Inland Empire (IE) is a serious contender for relocation if you do not move out of state all together. Western IE, now considered infill Los Angeles, is 45 miles from Downtown. The space ratio is generally 50% more space for the same rent and the additional cube height comes free. While new buildings are being absorbed as quickly as they are being built, there are currently several million square feet of space going through the planning process. If you are taking a big chunk of space, the time to get the best deals are just after entitlement and before construction begins. This is when developers are looking for financial partners and will consider pre-sales.
Continue reading “The Move To Inland Empire”

Another trend, popular in West L.A. and DTLA, as well as other creative centers across the country is Space Sharing. Networks, mobile computing and particularly start-up finance, has made sharing office and desk ubiquitous. Many innovative industries share common production resources like equipment, processes, and costly tenant improvements in Maker Spaces. (see New Industries post). While normally more expensive on a square foot basis, the total cost of rent, on a demand and hedged basis, is much less. Compatibility, or in the Space Sharing vernacular, curation, is an essential factor easily overlooked. Having a common bond or a similar industry cluster increases the likelihood of success. The drawing below is of the LaKretz Innovation Campus in Downtown Los Angeles, a 65,000 square foot space that can be easily adapted for the changing needs of multiple occupants.

Continue reading “What Exactly Is Space Sharing?”

The Space Market is on a different trajectory than the general economy. Industrial building prices have doubled since the Great Recession and are up over 20% from previous peaks. Rents are keeping pace and $1.00 per foot Gross for industrial in Gardena and greater South Bay is becoming the norm in many segments especially for smaller units and new, Class A Buildings. All other buildings, while renting for less, are still at all-time highs. Space shortages persist across the board. A disconnect exists between a real estate pricing surge and muddling economic conditions.
Continue reading “What’s New For Gardena Industrial”

More and more, typical industrial development in the Inland Empire will look like this. Instead of one large warehouse with lots of truck doors, cities will require smaller buildings so not to conflict with nearby residential communities. This planning protocol significantly increases the costs for the developer but it creates opportunities for Occupiers who wouldn’t ordinarily find a building in smaller sizes to purchase.
Continue reading “Inland Empire Development Deal – 180,000 SF Total”

SIOR had their first European Conference in London at the end of June. Coincidentally, it was at the same time as the Brexit Referendum. The day before, gleeful developers, confident at being the center of the developed world were completely dazed by the results the next morning, with news of their world being threatened. However, it did not take long to speculate about the opportunities, not only in London but under a new financial order.
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The major theme in this stage of the cycle is space shortage. There are very few available buildings to lease or purchase. This has caused strong rent growth throughout the region. This is a national condition and all major industrial markets are suffering from a shortage of vacant buildings.
Continue reading “Fall News 2015”

Over the past year I have had the privilege of interviewing many of the top dealmakers in the industry. I moderated 3 panels and got to know many of the panelists individually. The dealmakers are mostly Senior Vice Presidents, Chief Executive Officers, or Chairmen from the top industrial REITS and national development companies. I pre-interviewed everyone and this is where I learned the most. I also had great personal interactions at the conferences and met many more developers in high places.
Continue reading “Where The Deals Are II”

I had an excellent experience this week attending NAIOP I.CON, the Industrial Conference that was held in Long Beach. I had a significant role co-leading the “Follow the Freight” Tour that took place around the Long Beach Harbor. But also moderated the kick-off panel with the biggest developers in the country. I gave it a humorous sports theme that made it a little different. Audio will be available shortly that I hope I will be able to post.
Continue reading “I.CON ’15: The Industrial Conference”