Q1 2018 Market Report for Los Angeles, CA Industrial (San Gabriel Valley Submarket)

Overview:

The Los Angeles industrial market has reported extremely strong fundamentals and growth metrics for some time now, with key market indicators for both the overall economy and real estate market trending in a positive direction and consistently topping record-breaking levels. Unemployment in the month of February was 4.5%; unchanged from January and down from 4.9% from one year ago. With an adult population over 8.6 million in Greater Los Angeles (including very dense residential communities and strong household income levels), the region has become the center of focus in the e-commerce world. This explosive growth industry coupled with strong trade volume at the ports have translated into historic demand for industrial space. Online sales will continue to outperform growth in total retail sales, and the National Retail Federation projects that import volume will be up nearly 5% in the first half of 2018. The need for warehousing and distribution space shows no signs of diminishing. In addition to low unemployment, the economy is humming near top speed with tax cuts, low interest rates, and overall good financial health of the market’s tenant base. Demand has been especially strong in Logistics & Distribution, Apparel, and Manufacturing sectors. The arrival of newer needs such as legalized cannabis have also contributed to the already pent-up industrial demand.

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