Industrial Market Tightens, Rents Rise

LOS ANGELES—The industrial market in the L.A. area continues to tighten, and rental rates are on the rise. The Saywitz Co. has experienced this activity first hand, completing three industrial lease transactions in the greater L.A. area. Interestingly, the three leases total 55,400 square feet, showing that small-box industrial is in high demand.

“The industrial market in Los Angeles County is the tightest in the entire country much of which is driven by demand at the port and constrains on available supply with limited abilities for new development,” Barry Saywitz of the Saywitz Co. tells GlobeSt.com. “The office sector continues to improve rapidly as the aerospace, healthcare and tech markets as well as others continue to thrive. Demand for quality industrial and office space throughout Los Angeles County will continue to increase as the overall economy grows.”

Altmans Products signed the largest of the three leases, a 62-month lease for a 33,660-square-foot space at a facility in Torrance. The remaining two leases include Granada Kitchen & Floor, which signed a five-year lease for a 14,625-square-foot space in the City of Industry, and Argus Contracting, which signed a five-year lease for a 9,051-square-foot space in Santa Fe Springs.

“Overall, the reduction in vacancy rates combined with increased demand is continuing to drive rental rates up and concessions for tenants down,” says Saywitz about the drivers behind the industrial leasing activity in L.A. “While there are still submarkets that are softer than others overall projections for the marketplace as a whole will have continued upward trends in rental rates as vacancies continue to drop.”

The ports are, of course, the major industrial driver in the L.A. market. In May, the ports had a 6% increase in activity. The month was the ports' best month in the past eight years, since before the downturn.