Industrial Transaction Volumes Headed Down

David Grote is a principal at The Klabin Co.

LOS ANGELES—Industrial transaction volume in the South Bay market are likely heading down as a result of the incredible dearth of supply. The market is now reporting a .5% vacancy rate, according to David Grote, principal at the Klabin Co. As a result, lease rates and property values are expected to rise, says Grote.

“It will likely make the volume of transactions lower,” Grote tells GlobeSt.com. “The majority of leases and sales are with companies already in the area. A company that might otherwise think of moving to a bigger or better facility might decide to stay put just because there aren’t many better alternatives available.” Transaction volumes are already heading down. Last year, the South Bay market has 3.5 million square feet of leasing and sales activity, which, while a historical average, was a 20% decline from 2015 transaction volumes.