How Brokers Are Landing Industrial Spaces for Tenants?

Industrial occupancy rates are hitting record highs throughout Southern California, and the tight market has left little opportunities for industrial users to secure spaces, let alone quality spaces. In fact, in some submarkets, vacancy rates have fallen below 1%—essentially meaning there is no available space. We asked a group of top industrial brokers in Southern California how they are landing spaces for their clients in such a tight market. The harsh reality is that finding a space is not going to be easy and it is likely going to take some time. In Los Angeles, the tightest industrial market in Southern California, brokers need to educate clients on the reality of the market and develop a strategy to secure a space once one becomes available. After all, competition is steep. "Industrial tenants in Los Angeles need to be educated before they start to compete for space," Zac Sakowski, EVP at JLL, tells GlobeSt.com. "It is important that they develop a realistic game plan so they keep pace with the market and other tenants vying for the same space. They also need to move fast as a delayed decision, or inability to make a decision, will result in a more costly real estate solution.  A decision today will save them money tomorrow." In Orange County, brokers echo the need for education and a game plan. In addition to developing a competitive strategy, the game plan also means securing necessary documents in advance to expedite the leasing process. "My advice to tenants in Orange County is to get educated, be ready to commit and when ready to submit proposals it's imperative your proposal is thorough, realistic considering today's market dynamics and accompanied by financials and an overview of the company and its intended use of the space," Zach Niles, managing director at JLL, adds. "The fewer questions a landlord has after reviewing your proposal the better positioned you'll be." The Inland Empire, thanks to an abundance of land and new construction, securing a space is marginally easier—but brokers say that speed and diligence is still important to secure a quality space. "Our advice to tenants is to negotiate early and get the lease signed as quickly as possible," says Mike McCrary, managing director at JLL. "Landlords have all the leverage in today's market, so extended lease negotiation can put tenants at risk to escalating market rents, which can cause a landlord to ask for a higher rent or lease the space to another tenant. Offering a bigger security deposit will also help to secure a space especially if the tenant doesn't have the best credit."