Lack of Distribution Facilities Fosters Demand

IRVINE, CA-With the first big-box industrial lease of the year signed in Orange County, as GlobeSt.com reported last week, one wonders if others are soon to follow. However, if we take a look back at the number of true big-box distribution leases that were signed over last couple of years, it’s not likely that many more are in-the-works for this year. Zach Niles, SVP industrial real estate advisory and brokerage operations for Jones Lang LaSalle, tells GlobeSt.com that only six new, organic industrial transactions over 100,000 square feet were completed in Orange County in 2012, and of those, only four were for true distribution assets. In 2013, the total number of big-box transactions rose to ten, but only three were true distribution deals.

“You could attribute this low number to the lack of class-A and true distribution facilities available in Orange County,” says Niles. “The hottest product type is 100,000- to 200,000-square-foot space, which is nearly nonexistent, and the availability is nil.”