From Prologis’s 7 Supply Chain Predictions for 2023
We’re happy to report another successful lease renewal for a long-term client here in Fullerton, CA on this 91,116 SF Class B industrial property at 1400 Manhattan Avenue. Here is a copy of the posting I made for this one to give you a flavor of how lease renewals are shaping up when the market is in flux:
“You might wonder what lease renewals look like these days with rates as high as they have ever been. This is a great example. We had to be willing to walk from a fully negotiated lease. We had to be willing to allow the building to go onto the market and roll the dice on whether it would be there later. We had to scour the North Orange County, Mid Counties, and the Inland Empire West. We had to underwrite how we could operate out of two buildings. We had to underwrite what it would look like to operate out of a smaller building along with an Industrial Outdoor Storage site. We had to submit multiple RFPs to the market. We had to leave a second building lease one turn before it was ready to execute.
Then the market slowed. The building wasn’t leasing. We were a few months out. The landlord provided one last significant concession. It was at that moment when we truly understood the value of executing the lease renewal, and it was of real value to us. Valuable to our customers. Valuable to our employees. Valuable to our entire enterprise. So we stepped up, executed the lease within 24 hours, and successfully secured our place to grow for the foreseeable future.”
We are finding that Broker’s Opinions of Values have taken off this past two weeks as industrial investors decide to reprice, go off market or refinance. On the leasing front, we are helping asset managers create strategies for how and when to engage with tenants on lease renewals and upcoming vacancies. We have been monitoring certain assets monthly and can add you to our list for specific assets as you need.
This Thursday, I’ll be speaking at the annual Appraiser Institute, for my third time, at their continuing education forum about the state of industrial real estate in Southern California. I can also share my presentation deck with you.
We are working with a family office allocating $100 million of capital investment into Class A & B industrial assets across the United States. The focus is on net leased assets of existing industrial property with 5-year minimum lease terms. Please let us know if you have any assets you would like us to consider.
We’d love to catch up with you and brainstorm how we can make your goals come to life.
Justin Smith, SIOR Grant LaBounty
Chris Vassilian Jeannette Cano