LOS ANGELES—Solving for the last mile has become the biggest challenge for ecommerce users looking to deliver goods quickly to consumers, and it is an especially severe issue in Los Angeles, where the vacancy rate has dropped below 1%. Now, last-mile users are heading north into the valley markets to look for space that is still accessible to clientele. While the traffic into the city can be rough, there are a handful of new developments in the market that are attracting users.
“There is very little land and very little product, and it is very challenging for the last mile logistics users,” John DeGrinis, SVP of the North Los Angeles Market at Colliers International, tells GlobeSt.com. “It is really challenging for the last-mile logistics users. This is what the big box users are dealing with. Users struggle with being located north because the traffic patterns are so significant coming back into the basin. Time is money with these operations, and these companies can't see the benefit in being that far out of the population center. I think that is going to have to change soon because there is no possibility to build in the infill markets, and some developers are trying to accommodate that situation.”
While last-mile users haven't flocked to the market, DeGrinis expects to see a wave of new users soon. “We have vacancy rates that are sub 1% throughout the L.A. Basin,” he says. “We haven't seen too many examples of this, but there are developers that will look to areas that are a little bit outside of these infill markets. Tejon Commerce Center is a perfect examples.”
These aren't small facilities. While the major 500,000-square-foot-plus properties are reserved for further away warehousing facilities, these properties still need to be 50,000 to 100,000 square feet, and ideally, would be located throughout the Los Angeles market. That is a lot of real estate for an already tight market. “The buildings that are being built today have all of the state-of-the-art features that users want, and last mile users need a minimum of 50,000 and probably more like 100,000 square feet to make their buildings work,” says DeGrinis.
New developments include Tejon Commerce Center, a 400,000 square foot property in Tejon Ranch. DeFrinis says that the market can absorb another three or four similar properties. “This is the most expensive piece of the ecommerce supply chain,” adds DeGrinis. “It is an evolving science, and it is a science because it is really about how to move products from the warehouse to your home in a pattern that is the most efficient.”
LOS ANGELES—Solving for the last mile has become the biggest challenge for ecommerce users looking to deliver goods quickly to consumers, and it is an especially severe issue in Los Angeles, where the vacancy rate has dropped below 1%. Now, last-mile users are heading north into the valley markets to look for space that is still accessible to clientele. While the traffic into the city can be rough, there are a handful of new developments in the market that are attracting users.
“There is very little land and very little product, and it is very challenging for the last mile logistics users,” John DeGrinis, SVP of the North Los Angeles Market at Colliers International, tells GlobeSt.com. “It is really challenging for the last-mile logistics users. This is what the big box users are dealing with. Users struggle with being located north because the traffic patterns are so significant coming back into the basin. Time is money with these operations, and these companies can't see the benefit in being that far out of the population center. I think that is going to have to change soon because there is no possibility to build in the infill markets, and some developers are trying to accommodate that situation.”
While last-mile users haven't flocked to the market, DeGrinis expects to see a wave of new users soon. “We have vacancy rates that are sub 1% throughout the L.A. Basin,” he says. “We haven't seen too many examples of this, but there are developers that will look to areas that are a little bit outside of these infill markets. Tejon Commerce Center is a perfect examples.”
These aren't small facilities. While the major 500,000-square-foot-plus properties are reserved for further away warehousing facilities, these properties still need to be 50,000 to 100,000 square feet, and ideally, would be located throughout the Los Angeles market. That is a lot of real estate for an already tight market. “The buildings that are being built today have all of the state-of-the-art features that users want, and last mile users need a minimum of 50,000 and probably more like 100,000 square feet to make their buildings work,” says DeGrinis.
New developments include Tejon Commerce Center, a 400,000 square foot property in Tejon Ranch. DeFrinis says that the market can absorb another three or four similar properties. “This is the most expensive piece of the ecommerce supply chain,” adds DeGrinis. “It is an evolving science, and it is a science because it is really about how to move products from the warehouse to your home in a pattern that is the most efficient.”
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