Market Update Presentation
Spoiler alert: The industrial market is in a state of decline. However, there are signs of very real activity that have industry insiders speculating on whether this is the bottom of the industrial market in Southern California.
My hot take is that we have bottomed from a sense of market velocity, meaning velocity has hit an all-time low and is improving and on track to be better than last year and the year before. But are we at the bottom of the leasing and property sales markets? Undoubtedly no. How much longer? The devil is in the details as always. 10,000 SF buildings could be in 3-6 months, 100,000-300,000 SF could be in 2 years, and 1,000,000 SF could be 3-6 months. So much changes each quarter that it is difficult to predict but there are no deliveries in the small size and the new delivery pipeline is drying up with few projects kicking off for next year completion.
I just had the privilege of presenting the Inland Empire Industrial Market Update for the Appraisal Institute's Southern California Chapter. I have already given the Los Angeles and Orange County market updates for the past couple of years, and our team has grown in deal velocity in the Inland Empire market substantially, so it was an honor to provide this years market update.
Now, these are not your typical mom-and-pop residential appraisers. You'll find appraisers from all the major firms and independents who handle sophisticated institutional investors' portfolios and arbitration disputes. They are an often under appreciated group in the brokerage community that few discover as a wealth of information and collaboration. However, this group continues to impress with its intimate and sophisticated knowledge of all of the main players in the business and the characteristics of properties that drive value.
Here are my presentation slides for your review. I cover national market trends from Prologis, Port of LA, and Long Beach stats from LBA, Amazon intel from CoStar and Compstak, and real-time active lease and sale availability from assignments in the market as we speak. Lastly, I share some anonymous institutional investor sentiments to illustrate how the most prominent players view today's market.
Lee Summit 2024
We have an annual gathering at our company, often in Las Vegas, with increasing record turnout. This year's group was the best camaraderie I've seen to date and full of opportunities to learn from peers and network with colleagues to find industrial deals to invest in. My favorite presentation is always from our top producing broker, Craig Coppola, in our Phoenix office, and this year did not disappoint. He shared lessons from his two books on personal and professional development called The Fantastic Life Revisited and Rocks, Gravel, Sand. I was fortunate enough to be invited to the Top Producers Breakfast, which was a highlight of the trip where we discussed building culture within our teams. Email me if you'd like to see my eight pages of notes. Topics range from creating a diversified team where people are operating within their unique abilities, identifying your team culture's blind spots, leading from the front, building a self-managing team, and sacrificing to build that culture. For anyone familiar with Strategic Coach, you will get 2x out of this content.
Summer Interns
We are fortunate to have two summer interns who will be helping us update with clients and prospective clients, canvassing, helping research accounts and contacts, recording podcast episodes, and fleshing out some marketing initiatives. Give them a warm welcome if they reach out to you.
Ben Romeo is returning to our team after being with us last year. He is a rising senior at the University of Southern California, attended Sage High School in Newport Coast, studied abroad at the University of Manchester, and is a perennial Dean's list student.
Will O'Neil is also a rising senior at the University of Southern California. He went to Newport Harbor High School (our rival as I went to Corona Del Mar, but we'll let that slide), played collegiate baseball, interned for Matthews Real Estate last summer, and hails from Newport Beach.
Call to Action
We are working double time this summer as the bottoming of the market is increasing velocity. Tenants try to maximize concessions while they are present, and investors are increasingly re-entering the market with confidence to deploy capital. Reach out to Grant, Chris, or me to discuss how we can start adding value for you today.
Best Regards,
Justin
Justin Smith, SIOR
jbsmith@lee (mailto:jbsmith@lee-associates.com) irvine.com (mailto:jbsmith@leeirvine.com?subject=Newsletter%20Follow%20Up)
949.400.4786
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