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John McMillanThe industrial supply in Los Angeles is only getting tighter, and for tenants that is going to mean higher rents and even more challenges securing space in 2019. According to the latest market report from Newmark Knight Frank, the Los Angeles industrial vacancy rates was 1.1% in the fourth quarter, and while there is some new construction activity, the absorption rate is on par with new supply. In fact, new product built in the last eight years drove the absorption activity in 2018.

“Educating tenants as to how tight market conditions are remains one of the toughest jobs we have right now,” John McMillan, vice chairman at Newmark Knight Frank, tells GlobeSt.com. “Many leases that are rolling were transacted from 2009 to 2013 before the market really took off.  Back then tenants might have had 10 to 20 options or more to choose from, depending on the size of the requirement and geographic region they were looking in. Now they might have just a handful at most.”

Kelsi Maree Borland

Kelsi Borland is a freelance writer and editor living whose work has appeared in such publications as Travel + Leisure, Angeleno and Riviera Orange County.

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