LOS ANGELES—The South Bay is poised for more growth this year in both the industrial and office markets. CBRE recently named Jodie Poirier as managing director of the South Bay office, and she is expecting rental rates to continue to climb in the industrial sector, which is the tightest in the country, and tech and media firms to drive occupancy in the office market.

“For Industrial, rates will continue to increase with a focus on high-quality buildings,” Poirier, managing director of CBRE's South Bay office, tells GlobeSt.com. “The South Bay is the tightest industrial submarket in the country with a vacancy rate of one half of 1% percent. E-commerce continues to fuel demand and the world ports of LA and Long Beach posted record inbound container volumes during January 2017. Forty percent of all inbound freight coming into the U.S. comes through these two ports. Development opportunities are scarce, and Class A product can't keep up with demand.”

While the industrial market vacancy is dropping below 1%, making any significant growth difficult, especially with limited opportunities for development, the office market is positioned for significant growth. The South Bay is a low-cost alternative to the adjacent West L.A. market, which is the home of Silicon Beach. “For office, the outlook is very positive with strong rental growth possibility,” says Poirier. “We're still a value market compared with West LA and the northern markets. We're seeing a lot of tenant diversity with tech, media, service sectors. Firms are consolidating here from all over the LA basin due to our central LA location, strong labor base, housing availability, and demographics. Another big trend we're going to continue to see is the redevelopment and repositioning of excess corporate real estate; offering large-scale office solutions that don't exist in other markets.”

Instant Insights /

South Bay, The Tightest Market in the Country

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