How to Secure Rare Single-Tenant Industrial Assets in L.A.

Los Angeles-located single-tenant industrial properties are in high-demand. The problem: they are becoming a rare find in the extremely tight and competitive market. This year, however, more product could come to market with owners encouraged by the strong market dynamics and record pricing. Daum Commercial’s Casey Mungo recently sold a 57,000-square-foot single-tenant asset in the Greater L.A. market, and says that while highly desirable, there are opportunities to buy.

“Since these assets are in high demand, cap rates can sometimes be extremely compressed,” Mungo, EVP at Daum, tells GlobeSt.com. “We are seeing cap rates between 3.5% and 4.5% on a regular basis. Sellers are taking this opportunity to move their equity into investments producing increased cash flow.”

These deals are highly desirable because of the location. Southern California and Los Angeles in particular is one of the most coveted industrial markets in the country. “Well-appointed industrial properties in the submarkets within the immediate vicinity of the ports of Los Angeles and Long Beach are highly desirable and sometimes hard to come by, as demonstrated by vacancies consistently posting in the 2-percent-range,” says Mungo.