Industrial Submarket Boundaries Are Blurring

LOS ANGELES—The boundary lines between industrial submarkets are starting to blur. The trend is an effect of the tightening Los Angeles and Southern California markets and the plummeting vacancy rate, which has fallen below zero in some submarkets, like the South Bay. Tenants are scrambling to get any available space possible, and are willing to look at alternative submarkets to find an appropriate space.

“The one thing that has really happened in the last three years is the boundary lines between submarkets have blurred,” Chuck Littell, VP at Colliers International, tells GlobeSt.com. “When I first started in the business, there were really strong lines between the different submarkets, and it was a big move, for example, for someone to go from Central L.A. to the South Bay or to move from the South Bay to Santa Fe Springs. That has gone by the wayside. As the world has gotten smaller, there has been a blending between submarkets, and people are considering areas that they didn’t before. The walls are falling down between the submarkets.”