Industrial Insights - October LA/OC Newsletter
Lease Rates
Orange County industrial leasing shows moderating rent expansion. Properties with lower price points and larger square footage for logistics see the strongest rent increases, while higher-priced smaller R&D spaces experience the slowest growth. "Leasing concessions are still around and more prevalent than actual rate discounts."
Sale Prices and Cap Rates
The Orange County industrial sales market is averaging $250 per square foot with 4.7% cap rates throughout 2020. Investors seeking attractive yields for 1031 exchanges face ongoing challenges. Geographic search patterns have shifted—buyers previously focused on specific Southern California regions now evaluate properties across multiple counties. Capital relocation to Texas represents a notable trend.
New Activity
13220 Molette, Santa Fe Springs — A 70,706 SF tenant lease concluded after five years. The transaction highlighted dock levelers as valuable alternatives to full pit levelers.
3501 W Segerstrom, Santa Ana — A 20,000 SF warehouse storage space within a 65,000 SF facility featuring multiple dock access points and existing racking. Asking rate: $1.05 gross.
1800 Country Rd 427A, Cleburne, TX — Single-tenant triple-net Dollar General property south of Dallas-Fort Worth targeting 6.1% cap rate with thirteen years remaining on the initial lease.
9277 Research Dr, Irvine — High-tech office coworking space suitable for startups seeking creative environments outside traditional office towers.
Market Insights
Ecommerce and logistics dominate new speculative construction nationally. Major operators are acquiring 40-50 warehouses monthly, signaling structural shifts in demand dynamics.
Upcoming Book
The Logistics of Leasing: The Tenant's Playbook for Industrial Real Estate addresses warehouse automation, robotics, and emerging technologies reshaping the sector.