Middle Market Digest: This Week in Southwest

Deal volume remains strong into the early summer throughout the Southwest market. While all of the markets are seeing strong investment demand, Phoenix continues to shine. The Phoenix market is seeing investment activity across asset classes as well as increased interest from institutional and foreign capital sources. For example, Canada-based Triumph Real Estate Investment Fund purchased Glendale Northwest Center, a 16,706 square foot shopping center located at 18255 N. 83rd Avenue, Glendale and is currently leased at 87.50%. The major food groups have been the most active investment sectors, unsurprisingly, but there is also notable activity in more niche markets. Marcus & Millichap’s net-lease investment team, for example, led by executive directors Jamie Medress and Mark Ruble has closed six net-leased medial office assets in Arizona this year. The total value of the sales is $27.1 million. Here’s a look at this week’s trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

LOS ANGELES— The South Bay area of Los Angeles has seen the most dramatic rent growth in the Greater L.A. market. Asking rents continue to increase in all submarkets in the L.A. Basin but the South Bay submarket has seen the most rent growth at 48.4% in the last five years. Asking rents are also the highest in the South Bay when compared to the rest of  the county by about $0.08 to $0.10 per square foot, monthly. The South Bay’s proximity to the L.A. and Long Beach Ports, LAX, as well as its five freeways and the Alameda corridor, make the South Bay a highly desired market to be in. Recent leases are rising above $0.95 NNN per square foot. Rents are expected to continue to increase throughout the next 18 month at the same quarterly growth rate of  2% to 3%.