Are There Any Danger Signs Ahead for Industrial?

Jeff Rinkov is the CEO of Lee & Associates.

LOS ANGELES—The industrial market “has shown remarkable consistency for the past several years,” according to the Lee & Associates 1Q16 industrial report, which GlobeSt.com has received exclusively. Rental rates and absorption have been on a steady incline since 2010, and 1Q16 was no different. The quarter saw sub 7% vacancy rates across the country and 46 million square feet of absorption, and the look ahead is just has bright.

“Based on where we are in vacancy rates in major markets across the country and in Southern California specifically, I don’t see it changing,” Jeff Rinkov, the CEO of Lee & Associates, tells GlobeSt.com. “These are markets where we don’t have developable land, and where we have only seen real rent growth in the last 12 to 14 months, which has been a lagging indicator. I think the trajectory in real estate values is going to be support from rent growth. We are seeing anecdotal development, which is getting absorbed very quickly, either upon completion of construction or in advance. I think the diversity of the L.A. market and it being home to the largest ports in the country will have a compounding effect on the continued success of the market.”