Happy Friday. Here is a snapshot I put together this week that details out each of the main markets in my territories of expertise and hyperlinked market reports for those markets. Feel free to reach out with specific questions as needed. Thank you!
Top 7 Industrial Market Insights
We have 21 million square feet of industrial property in “The Spectrum.” What’s unique here is that 51% of that space is Flex space for labs, technology, assembly, climate controlled users. Vacancy is 5.7% and asking rates for distribution space average $1.21 Gross whereas Flex space is averaging $1.59 Gross. In the higher end properties, rates are averaging $1.50 NNN! That means you could be all in for $2.00 PSF after all the operating expenses are factored in. You can download the market report for the Irvine Spectrum.
There is 18 million square feet of industrial in what we refer to as “The Airport” or “The IBC (Irvine Business Complex).” Here we are almost split amongst 1/3 logistics, 1/3 manufacturing, and 1/3 flex spaces. Most of the largest warehouses have been acquired, demolished and been developed into apartments. Rents are usually 3-5% less than the Irvine Spectrum. Most CEO’s often times users base their Irvine vs Irvine Spectrum decision on employee drive times and customer drive times as there is increasingly a divide based on increasing traffic flows. Market analytics breakdown report can be downloaded here.
Anaheim / Fullerton
Anaheim and Fullerton have 50 million and 21 million square feet of industrial space respectively. Rental rates on logistics buildings are averaging right around $1.03 GRS for Class A space. Class B space is hovering right around $0.85 GRS. Vacancy rates are 2.0% & 5.5% respectively. This is a great market for larger industrial distribution firms sitting in the middle of the ports, the IE, LA and OC county. This market will stay tight despite the handful of new developments taking place. Market analytics breakdown report can be downloaded for Anaheim and for Fullerton.
Costa Mesa / Santa Ana
Costa Mesa has 12 million square feet and Santa Ana has 35 million square feet of industrial properties. The market is largely comprised of primarily Class B industrial properties with 20′-24′ clear height, there is a small segment of Class A buildings for logistics, and then the primary segment is smaller user buildings of 5,000-20,000 SF. The market stats are slightly skewed due to the approval of cannabis related users in certain segments of these two cities. Rents for cannabis properties are usually 2-3X traditional rents. Traditional rents are ranging from $1.08 – $1.29 PSF. There is a large development called the Shea Business Center on Dyer where the medium to large users are gravitating. Sizes available here are from 27,000 – 166,000 SF. Market analytics breakdown report can be downloaded for Costa Mesa and for Santa Ana.
Santa Fe Springs / La Mirada
The gem of what we call “Mid Counties” where there is great opportunity for small and large customers alike and for new construction. Santa Fe Springs has 61 million and La Mirada has 17 million square feet respectively. Vacancy is only 2.3% as users who are priced out of the South Bay are adding to the demand levels. Rents average $1.01-$1.03 GRS. There are multiple new development opportunities in this market of Class A industrial buildings ranging from 130,958 – 234,330 SF. Market analytics breakdown report can be downloaded for Santa Fe Springs and La Mirada.
Carson / Compton
The main markets in the South Bay are as tight and expensive as ever. Carson has 24 million square feet and Compton has 32 million square feet in their industrial inventory. Vacancy is 2.1% and and asking rates are coming in around $1.03 – $1.07 all in. Prologis, Watson Land Trust and Carson Companies continue to reinvest heavily here. They are great to work with and provide first class warehouses. The lack of available inventory can be seen in that there is only one +300,000 SF building for lease and two +100,000 SF in Carson, the premier port city for distribution users. Imagine how competitive it is for that one building! Market analytics breakdown report can be downloaded for Carson and Compton.
Vernon / Commerce
Vernon has 41 million square feet and Commerce has 50 million square feet of industrial inventory. Vernon is well known for having more warehouses than residents, food production plant and the LA river whereas Commerce is the workhorse of the “LA Central” market with a large base of functional Class A & B logistics and manufacturing buildings. Rents trend slightly lower from $0.91-$1.01 PSF however Vernon has seen a slew of new development continue. Customers choose these markets for its proximity to cold storage 3PL’s, food production infrastructure, the electric utility rates and proximity to DTLA, the ports and the IE. Market analytics breakdown report can be downloaded for Vernon and Commerce.
Feel free to reach out for information on any market. I’m working on on deals in San Francisco, Tampa, San Antonio, Dallas and Wales at present and have the resources to provide value in most markets.
Top 5 Office Market Insights
The Irvine Spectrum has 15 million square feet of office with approximately 1/3 Class A high rise and 2/3 Class A mid and low rise properties. Market rents for the Class A property is trending around $3.44 PSF FSG and $2.56 PSF respectively. Vacancy rates are more at play in the office market and is 20% in Class A high rise and 15% in Class A low rise. Anyway remotely familiar with the area understands that the market is dominated by the Irvine Company as far as percentage of ownership of the inventory is concerned and when it comes to new development as well. We have seen the completion of the first phase of the Spectrum Terrace project, the near completion of 6 different buildings within Discovery Park and and look forward to phase 2 of the Spectrum Terrace to break ground imminently. The market report can be downloaded here.
Irvine / Tustin Legacy
The Airport area largely incorporates office product along the 55, 73 and 405 freeways. There is approximately 28 million square feet up inventory. Class A rents are coming in just under $3.00 PSF Full Service Gross and Class B rents closer to $2.67 PSF. These are average figures where you’ll find higher rates in the nicer properties and as you go to higher floors within high rise properties. Vacancy here is 18.1% and 9.6% respectively. The main developments here have been 1) the completion of The Boardwalk along Jamboree, 2) the repositioning and lease up of the prior Broadcom headquarters at the UCI Research Park and 3) the completion of The Flight on Barranca within the Tustin District redevelopment. Large leases have been signed with Rutan & Tucker and WeWork in the Boardwalk, the UCI Beall Center for Innovation at the UCI Research Park, and Payoff at The Flight. There are still several large full floor opportunities for large players and plenty of smaller spaces in various locations for the smaller players. The market report can be downloaded here.
Newport Beach’s office inventory is approximately 14 million square feet. While the average Class A rental rates are roughly $3.71 PSF FSG, you’ll see $3.70, $4.40, and upwards of $5.80 and beyond in some of the Fashion Island’s top tier office properties. Class B properties are closer to $3.30 FSG. Vacancy hear is very low at 10.2% and 6.1% respectively as there is limited new development’s in the pipeline. With the continued reinvestment into Fashion Island office and retail properties, this location has never been more attractive. The market report can be downloaded here.
Costa Mesa / Santa Ana
Costa Mesa is broken up into South Coast Metro and Airport whereas Santa Ana is broken up into Airport, Parkcenter, Main Place and Civic Center submarkets. Costa Mesa has roughly 9 million square feet of office properties and has one large new development in the South Coast Metro called The Press. The Press is the old LA times distribution center that is being creatively repositioned into a Class A creative office campus with one of the most expensive multi level atriums know to Orange County. Class A rents are averaging $3.06 PSF full service gross. Class be rents are closer to $2.50 PSF. Santa Ana on the other hand has some 25 million square feet of inventory divided between each submarket. The submarkets are too numerous to detail here and I will attach each market report or leave it to a meeting with you to detail as needed. Each submarket in Santa Ana is vibrant and has its own dynamics. You can download the reports for Costa Mesa, Santa Ana, South Santa Ana, Parkcenter, Main Place and Civic Center.
Anaheim / Anaheim Hills
The Anaheim marketplace is comprised of the Stadium, North Anaheim and Anaheim Hills. The three submarkets collectively total 12 million square feet of office inventory. You’ll see Class A rents average around $2.70 Full Service Gross and Class B rents closer to $2.20 Full Service Gross. Vacancy is surprising low in these markets with Class A vacancy highest in the Stadium at 16%, 7% in North Anaheim and 11% in Anaheim Hills. We see a lot of headquarter leasing activity in the Stadium, back office users in North Anaheim and higher end medical practices in Anaheim Hills. You can download the market reports for the Stadium, North Anaheim and Anaheim Hills.
Outside of So Cal
25% of the work that I do for clients is out of state. This can be a corporate customer and their global footprint, or it can be a private family or individual who is buying or selling an investment property out of state. Let me know what property you would like an evaluation on or what market you would like to target and I’ll come back to you with a high level insight on that market and property. With my company’s international presence, my SIOR network and my 15 years of experience, there are few nooks and crannies of the world that I haven’t looked in and connected with top talent.
Let me know if I can be of assistance with your properties, leases and/or any real estate matters. I’m happy to help!