IRVINE, CA—Demand for industrial propertiesfrom would-be buyers in several size categories is fuelingall-cash, multiple offers for space in South Orange County,particularly for off-market deals, CBRE brokerBrian Cole tells GlobeSt.com. Cole recently closeda spate of industrial acquisitions in thissubmarket that fit this description.

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As GlobeSt.com reported earlier this week, Cole representedthe buyer in each of three South Orange County sales transactionsthat reflect the current, highly competitive environment wheremultiple offers and all-cash buyers are becoming the norm:33033 Camino Capistrano in San Juan Capistrano,24799 Alicia Pkwy. in Laguna Hills and27002 Vista Terrace in Lake Forest. Thelatter two transactions were off-market transactions.

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Cole says there is true demand in the market for properties inthe 10,000- to 50,000-square-foot range, since so few areavailable. “In South Orange County, there are two buildingsavailable for sale in this size range. From an industrialstandpoint, that's crazy low.”

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He adds that in the 50,000-square-foot-and-above category, thereare only five buildings available for sale in this submarket. Thecombined pent-up demand will be fueling newdevelopment next year, he predicts.

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“There are a couple of projects coming up that have reallyperked up a lot of developers' ears because of theamount of activity we're seeing with smaller buildings,” says Cole.“There's a boom in pricing, and everything seems to be ramping up.The main thing is the lack of inventory, and buyers have to do whatthey can to be portrayed in the best light in order to be the onechosen.”

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Once more buildings come to market, which hasn't been happeningin the last couple of months, the frenzy might begin to tone down,Cole says. “We're anticipating interest rates going up, but theyseem to be pretty level over the past 12 months, and there justseem to be a lot of buyers on the sidelines waiting for anyopportunity to come in front of them.”

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In addition to the size buildings mentioned above, Cole isseeing large demand for smaller buildings—in the 5,000- to10,000-square-foot range. “There's a very minimal amount ofon-market properties like that.” He's also seeing a lot of overseasmoney coming into the market for these properties, particularlyfrom Asia.

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The highly competitive environment is creating moreoff-market sales than usual. “It's making our joba little more challenging to uncover these opportunities,” saysCole. A lot of it is with our marketing and direct relationshipswith property owners, being able to go to the right person if weknow of an opportunity. It's a really lucrative way to go aboutthese things.”

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Even off-market deals are sometimes generating multiple all-cashoffers, he adds. “Other brokers are doing the same thing we aredoing. Because of the lack of inventory and the demand from buyers,we have these guys in our back pocket ready to chomp at the bitwhen these buildings become available. It's creating a bidding waron off-market property, which is pretty rare.”

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Carrie Rossenfeld

Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.