Which L.A. Submarket Is Seeing the Most Industrial Development?

Industrial new construction has been concentrated in the San Gabriel Valley in the last decade. According to research from JLL, the San Gabriel Valley has seen 36% of the total new industrial development in the Greater L.A. area. In the last decade, 365 new industrial properties have gone up in L.A., totaling 32 million square feet of new supply. While the San Gabriel Valley saw the majority of the new construction, the Mid Counties market saw the least amount of new development activity, with only 24% of the total development.

“As the San Gabriel Valley is one of the most sought after infill industrial markets in Greater Log Angeles, institutions are going after any and all land/redevelopment opportunities that pencil in,” Eric Chou, VP at JLL, tells GlobeSt.com, adding that one project—a 1 million square foot redevelopment project in South El Monte that was originally part of the Safeway portfolio—helped to boost the new construction statistics in the San Gabriel Valley market. “Another huge reason is that the Irwindale/Azusa areas have historically had underutilized land,” he adds. “We are seeing a conversions from gravel quarries to useable industrial land- essentially industrial land is being created.”

The significant new construction activity, demand for industrial space and dearth of available land has had a huge impact on land prices in the San Gabriel Valley. “Land prices in the San Gabriel Valley are sky rocketing,” says Chou. “The development activity of roughly 1.4 million square feet  is really a very small percentage (0.8%) of the total inventory of approx. 153 million square feet. The scarcity of land, rising rents, low vacancy, and protracted development processes, all contribute to creating upward pressure in land values.”