In Industrial Leasing, Go Big

A tip for tenants looking for industrial space in this very tight market: go big. That is, consider a larger space that can support room for business growth, according to Kyle Degener, an associate VP at Colliers International. With a 1% vacancy rate in some submarkets and a 2% vacancy rate everywhere else in L.A., subleasing is an option if the space is larger than required.

“When a larger property becomes available, but a company doesn’t know yet if it is going to work for them or they know that it isn’t going to work for them, subleasing is an option,” Degener tells GlobeSt.com. “In that case, if they have a long lease term, they are the master tenant and they are able to go and sublease that additional square footage. There is a comfort level in leasing a property that might not be the perfect, cookie-cutter property, but if they need to sublease it, the demand is still strong enough where you are able to find someone to backfill your space. There is obviously risk, but there is a comfort level in the high demand for industrial.”