What Sectors Are Really Driving Industrial Tenant Demand?

Joe Dimola is a VP at JLL.

Ecommerce gets the credit for driving Southern California’s robust industrial market, but the tenant roster is actually incredibly diverse. Food and beverage, third party logistics, packaging and manufacturing users are creating a diverse industrial market in Southern California, according to research from JLL. That isn’t to say that ecommerce and warehouse users aren’t an important element in the market. Los Angeles has long been home to a diverse roster of tenants because of the ports, but warehouse and ecommerce users are now playing a more dominant role than ever before.

“Los Angeles has always been one of the most diverse industrial markets in the United States due to many factors, such as its proximity to the ports of L.A. and Long Beach, strong labor pool, and the influx of ecommerce,” Joe Dimola, VP at JLL, tells GlobeSt.com “Major user industries driving industrial leasing demand are 3PL, food, import/export, furniture, apparel, and manufacturing. However, for the first time ever historically, these warehouse and distribution buildings are being used differently than they have in the past with the growth of ecommerce. The ecommerce phenomenon is very real, and it will continue to be a major player as online sales crush brick-and-mortar retail. Ecommerce user demand is highest for geographically well-located, class-A efficient buildings.”