Prologis came out with one of the best pieces of research providing insight for why there is no going back to how it was before the pandemic. This is a structural change. The main takeaways from the report:

1. The long-term structural growth rate of logistics real estate has risen. Consumption-oriented uses have grown as a share of logistics demand, while production- and trade-oriented uses have decreased.
2. Technology and demographics are transforming retail. Consumer expectations have increased in a permanent way. Prologis Research forecasts that global e-commerce penetration will rise by ~150 bps/year over the next five years. Physical retail will increasingly require rapid replenishment operations to compete.
3. Logistics best practices are going global. The resilience of the supply chain is being tested as companies expand globally, in turn driving the need for modern stock and decentralized networks. Coupled with a rising consumer class, this worldwide upgrade should generate the need for three to four billion square feet or more of modern logistics stock over the next cycle.
4. Location matters more than ever for logistics real estate customers. Supply chains are a key source of competitive advantage and will continue to drive financial performance.
5. The price elasticity of demand has decreased. Network planning decisions can yield revenue generation and cost control benefits that substantially outweigh real estate expenses, which represent just 5% of overall supply chain costs.

I encourage you to reach all the Prologis research reports as they do one of the best jobs in the industry. You can access this one here.

Featured Activity

• 9400 Norwalk Blvd, Santa Fe Springs (Announcement)
  • We leased this 48,384 industrial property for a private family trust. This was a great example of a successful outcome from a small dedicated team. Here we were able to leverage the time we had before lease expiration to position the property to land a national credit tenant for a long-term triple net lease. We were able to structure the tenant improvements so that the tenant would perform them in exchange for free rent, saving our client hundreds of hours and hundreds of thousands of dollars.
• 9830 Norwalk Blvd, Santa Fe Springs (Announcement)
  • We helped a growing e-commerce company lease out this 30,911 SF industrial property as the first part of a two-part assignment. In this instance, they are coming from a warehouse that they own. Now that we have navigated the ultra-tight market successfully, we can shift focus to backfilling their existing building with a great tenant so that they can continue to build their real estate portfolio.
• 15220 Canary Ave, La Mirada (Brochure)
  • We finished renovations this week. The property now has new paint throughout the office, interior warehouse, and entire exterior. Add to that, new flooring, refurbished bathrooms, new landscaping, new asphalt, and brand new fencing around the entire yard. We are touring firms now.

Market Reports

• Los Angeles County (Market Report)
• Orange County (Market Report)
• Inland Empire (Market Report)
• San Diego (Market Report)
• United States Market (Market Report)

Media

• Book
  • My publisher has confirmed an April 27th launch date for the book! I’ll be reaching out to you for your support during the book launch phase this next few months. Here are the renderings for Hardback and Paperback.
• Podcast – We’ve kicked off this year’s interviews and have a new format where you can listen to them, watch the highlights, or read the transcript. It’s great to catch up with old friends, make new connections, and flesh out how we can do better in today’s market. The first four episodes of the year are live with a new one dropping every week.
  • Rob Boese of WHSE Partners – Why you should consider investing in multi-tenant industrial business parks and about WHSE Partners’ new project in Madera, CA.
  • Lisa Anderson of LMA Consulting – The different ways a consulting practice can help executives navigate difficult business challenges and adapt to today’s environment.
  • Jake Smith of Duke Realty – The experiences and skills that he finds more useful to help Duke develop new industrial properties throughout Los Angeles, Orange County, and the Inland Empire.
  • Rush Harvey of Texas A&M Endowment – What the endowment looks for in industrial real estate investment general partners and their focus on small bay industrial.

We’d love to catch up with you and brainstorm how we can make your goals come to life. You can book time with me at your convenience: https://calendly.com/industrialsmith/. Thank you!

Best Regards,

Justin Smith, SIOR                              Grant LaBounty                               Jeannette Plumeda
jbsmith@leeirvine.com                         glabounty@leeirvine.com                jplumeda@leeirvine.com