Industrial Insights - November 2023 Newsletter
Executive Summary
This month's edition announces the launch of a new book on commercial real estate leasing while providing market analysis through lease comparables and insights from major industrial REITs.
Book Release
Industrial Income: The Investor's Guide for Maximizing the Value of Commercial Real Estate Leases is now available. The publication features interviews with institutional investors and guidance on the leasing lifecycle. Readers can access paperback, Kindle, and audiobook formats through Amazon.
Lease Comps Analysis
The market has reached peak lease rates, though rates have declined modestly. Despite recent decreases, current pricing remains substantially elevated compared to 2020 levels. Negotiations now feature increased concessions, yet tenants still operate within a high-cost environment.
Recent transactions across Southern California show diverse pricing: - Commerce property leasing at $1.25/SF annually - Fullerton facilities ranging from $1.12-$2.05/SF - Rancho Cucamonga space at $1.47/SF
Free rent concessions vary from zero to three months, with lease terms extending three to five years.
Prologis Q3 Performance
CEO Hamid Moghadam noted that "until there is more stability in the economy, negative" sentiment will pressure demand. The company maintains focus on capturing embedded lease value and expanding land inventory. Metrics show healthy lease proposal activity alongside elevated property improvement costs.
Rexford Q3 Highlights
Leadership reported 98% occupancy with projected 33% NOI growth over two years. Management described a "virtually incurable supply-demand imbalance," citing 20% month-over-month port traffic increases and the second-highest annual volume.
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Contact: Justin Smith, SIOR | Grant LaBounty | Chris Vassilian | Jeannette Cano
