Q2: An Extremely Dynamic and Demand-Intense Industrial Sector

Transcription

1 Industrial Market Report 3 Second Quarter Central-Los Angeles Q: An Extremely Dynamic and Demand-Intense Industrial Sector Even as other sectors of the economy lagged, the industrial sector in Q can justly be said to be one of the brightest lights in the economy. Marked by a dynamism and rich demand-intensity not seen since comparable prerecessionary quarters, the industrial sector was extremely robust and busy in both leasing and sale activity. To mention but merely one of the sales which exemplifies the dynamism of the sector, witness the transaction in one of the Los Angeles submarkets, wherein Lee & Associates served both as listing agent and procuring agent of an industrial property in the City of Commerce greater than, square feet for the sale price of $7 million. What is even more remarkable is that such transactions were occurring in a policy environment not leavened with certainty. MARKET SNAPSHOT ABSORPTION VACANCY AVAILABILITY Central Los Angeles In a move widely regarded as potentially premature, the Fed stated in its Q FOMC meeting that it intends to tighten its monetary policy by soon ending plans for quantitative easing. Because such a policy change was unexpected and ill-suited to an economy characterized by anemic growth Real GDP, for example, was revised down to.8% for Q capital markets took a turn for the worse. After dropping around points the day of the Fed s news conference, the Dow plunged 3 points the day after. Gold dropped nearly $, and the -year Treasury note jumped to over (Continued on page ) ND QUARTER 3 STATS Central Los Angeles Base (SF) 8,,39,8, Vacancy (%) Availability (%) 8..7 Sale Activity (SF),,8 88,38 Lease Activity (SF),63,369,8,8

2 Industrial Market Report > Central-Los Angeles Vacancy Rates Q3- Q- Q-3 Q-3 Downtown LA Commerce Area Vernon Area Mid Coun es Q3- Q- Q-3 Q-3 Downtown LA Commerce Area Vernon Area Gross/SF Avg Lease Rates.%. That marks a near 7-basis-point year-to-date increase for the -year. Still, if the maxim that the commercial real estate sector follows the residential housing sector holds true, then the industrial sector is on pace to continue having the strong year it is already enjoying. Existing home sales in May ran 3% ahead of the year-ago period, with single-family median home prices rising at 6%. And, although the pace has slowed over the past 3 months, new housing starts have been rising about 7% year-on-year. The and Central markets maintained their status as the strongest markets nationally. Relative to Q 3, both sub-markets had similar trends with respect to availability (both increasing) and diverging trends with respect to vacancy (the former increasing, while the latter decreasing). That is, compared to Q, while both the Mid and Central sub-markets saw increasing rates of availability, from 8.% to.89% for the and from 8.% to 8.63% for the Central Counties, the former increased in vacancy rates from.37% to 7.%- - as the latter declined, from.86% to.%..3.3 Q3- Q- Q-3 Q-3 Downtown LA Commerce Area Vernon Area Mid Coun es Q3- Q- Q-3 Q-3 Downtown LA Commerce Area Vernon Area Completed Transactions, SF SOLD Total Consideration: $6,, 87-9 E OLYMPIC BLVD Los Angeles Mike Smith represented the buyer, 9 Olympic LLC, in this sale transaction. Terminology AVAILABILITY RATE: The percentage of all space being marketed for sale or lease at a period of time in a given area. VACANCY RATE: The percentage of all unoccupied space being marketed for sale or lease at a period of time in a given area. GROSS LEASE (GRS): A lease agreement in which the stated rent being paid to the landlord includes property taxes and property insurance. GROSS ABSORPTION: Total number of properties leased or sold for occupancy at a period of time in a given area. TRIPLE NET LEASE (NNN): A lease agreement whereby the tenant is obligated to pay for all the operating expenses, i.e. property taxes, property insurance, and facility maintenance. BASE SF: Square footage of existing and under construction industrial buildings. 3,39 SF SOLD Total Consideration: $7,, TUBEWAY AVE Commerce Jack Cline and Jeff Bethel represented the buyer, Brian Dror, and Mike Tsaparian represented the seller, Ronald Bauer, in this sale transaction. 9, SF SOLD Total Consideration: $9,3, 6 E WASHINGTON BLVD Commerce Tony Naples represented the buyer, Oscar George, and Tom O Loughlin represented the seller, Ddp Properties, in this sale transaction. 78,977 SF LEASED 76 S VAIL AVE Montebello Peter Bacci and Tony Naples represented the lessor, MC Montebello LLC, in this lease transaction.

3 Industrial Market Report > Central-Los Angeles Economic Indicators Dow Jones Industrial Average Crude Oil Prices (usd/bbl),, 3,,,, 9, 8, U.S. Year Treasury Rates US Unemployment Rate Availabilities AVAILABLE FOR SALE AVAILABLE FOR LEASE Address Address Available SF Listing Agent Available SF Listing Agent 33-3 E 6th St, Vernon,669 M. Smith 69 Malt Ave, Commerce,6 J. Bethel 389 S Broadway, Los Angeles 6,7 A. Kazaryan 393 Slauson Ave, Whittier 8,79 T. Cronin S Anderson St, Los Angeles 7,9 J. Halferty 66 Chalet Dr, Commerce 6,37 J. Cline -9 S Hill St, Los Angeles 38, M. Smith 6 Jillson St, Commerce 9,37 T. OLoughlin Altamar Pl, Santa Fe Springs, T. Cronin -3 E Washington Blvd, Los Angeles,6 A. Kazaryan 993 Beverly Blvd, Pico Rivera 3, P. Bacci 3 Leonis Blvd, Vernon,9 J. Rinkov 87 S Soto St, Los Angeles 3, D. Brandt 9 Triggs St, Commerce 3,93 A. Artukovich E 7th St, Los Angeles 8,7 J. Rinkov 369 Talc St, Santa Fe Springs,37 T. Allan 8 S Santa Fe Ave, Vernon,978 L. Vusich 9 66th St, Cerritos, K. Ebinger 9-7 Hunter St, Los Angeles, M. Artukovich 7 S Boyle Ave, Vernon, D. Cline To see our complete list of available properties, visit us at

4 Industrial Market Report > Central-Los Angeles Lease and Sale Activity * Data through nd Quarter 3 Downtown LA,, 3,,,,,, 8 9 3* 6,,,,,, Commerce Area 8 9 3* Sale (SF) Lease (SF) Sale (SF) YTD 3,78,77 3,79,7 3,67, 3,9,9 3,6,7,386,39,86,,76,637,9,333,9,99 3,7,9,3, YTD,7,3,383,6,739,3,,33 3,76,8,673,8,8,73,38 9,77 637,6,,977 3,768,, 3,,,,,, Vernon Area 8 9 3* 8,, 6,,,,,, Mid-Coun es YTD,77,86,9,993,38,983,3,8,86,96 63,8 98,7 7,8,8,8,86,68,66,863 89, YTD 3,7,78 3,33,67,6,8 6,9,,89,7 3,77,7,,96,98,63,8,8,,88,,9 976,78 Vacancy vs Availability SELECT CENTRAL CITIES STATS (K AND UP) SELECT MID-COUNTIES CITIES STATS (K AND UP) Base SF Availability Vacancy Bell Gardens 3,88,98..8 Commerce,7, Los Angeles 3,38, Montebello,8,8..9 Pico Rivera,99, Vernon 7,3, Base SF Availability Vacancy Bellfl ower 7, Buena Park 3,933, Cerritos,863, La Mirada,3, Norwalk 3,37, Santa Fe Springs,93,

5 Industrial Market Report > Central-Los Angeles Offices LEE & ASSOCIATES - INDUSTRY 38 Crossroads Pkwy North, Ste 3 City of Industry, CA 976 P: F: Corporate ID# 9 LEE & ASSOCIATES - COMMERCE Citadel Drive, Suite City of Commerce, CA 9 P: F: Corporate ID# 9 Market Map Office Locations Central LA P a c i f i c San Gabriel Valley O c e a n N Mission Statement Lee & Associates group of companies is dedicated to continuing its leadership role in the commercial real estate marketplace. These companies provide comprehensive and quality representation to clients, locally and nationally, in a proactive and responsive manner, integrating the highest level of information, support, professionalism, and integrity. Our core philosophy of creating an organization of companies each independently owned by active commercial real estate agents now translates into the largest agent-owned commercial real estate organization in America. 7 3 Downtown LA 6 Vernon INDUSTRY Inglewood COMMERCE Huntington 6 Park 7 Santa Hacienda Heights Fe Springs 7 Brea La Mirada Norwalk Torrance Hollywood Burbank Long Beach Duarte El Monte 39 Glendora Pomona Diamond Bar 9 3 Claremont Rancho Cucamonga Lee & Associates Office Locations CALIFORNIA: Anaheim, Antelope Valley, Calabasas, Carlsbad, City of Industry, City of Commerce, Irvine, Long Beach, Los Angeles, Murrieta, Newport Beach, Oakland, Ontario, Orange, Palmdale, Palm Desert, Pleasanton, Riverside, San Diego, San Luis Obispo, Santa Barbara, Santa Maria, Santa Monica, Sherman Oaks, Stockton, Temecula, Victorville OTHER LOCATIONS: Phoenix, AZ; Fort Myers, FL; Orlando, FL; Boise, ID; Chicago, IL; Southfield, MI; St. Louis, MO; Las Vegas, NV; Reno, NV; Edison, NJ; Little Falls, NJ; Manhattan, NY; Dallas, TX; Madison, WI; Charleston, SC; Greenville, SC; Kansas City, KS; Greenwood, IN; Indianapolis, IN; Atlanta, GA The information contained herein has been furnished from sources which we deem reliable, but for which we assume no liability. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by Lee & Associates clients and professionals and all right to the material are reserved and cannot be reproduced without prior written permission of Lee & Associates. Ontario Commerce & Industry Agents Travis Allan Anita Artukovich Matt Artukovich Peter Bacci Jeff Bethel Patrick Bogan Chris Bonney David Brandt Michael Brent Chuck Campbell Kevin Ching Doug Cline Jack Cline Steve Coulter Tim Cronin Mollie Shea Dietsch Marc DiGennaro Adam Dzierzynski Kent Ebinger John Espinosa Jim Halferty Henry Hong Jeff Hubbard Jeff Huberman Armen Kazaryan Jim Kinetz Scott Kroman Chris Larimore Edward Lee Michael Lee Stacy Martin Hovik Mirzoyan Vincent Molitor Tony Naples Tai Ngo Tom O Loughlin Craig Phillips Jeffrey Rinkov Steve Shatafian Mike Smith Michael Tsaparian Leo Vusich Tim Wetzel Jason Woods Ron Young