Los Angeles industrial real estate market report
2021 experienced some of the highest cargo volumes as the pandemic pushed many companies to reevaluate inventories and turn their focus to a more “just in case” model. Just under 6.0 msf remains under construction, representing 1.1% of the total inventory, comprising 28 properties with the average anticipated delivery in August of 2023. Leasing transactions volume decreased by 37.7% in 2022 when compared to 2021, while the total square footage of all transactions decreased by 51.6% during the same time period.
At the end of 2022 there was 6.0 million square feet of industrial product under construction, which is down from 2021 when 7.7 million was under construction.
Los Angeles for the first time since 3Q 2020 reported negative with (378,358) sf.
Capitalization rates have been relatively flat in Los Angeles. At the end of 2022, the cap rates for industrial space were 4.3% on average and have been in the low to mid 4% range for the last 4 year.
The availability rate for the Los Angeles industrial market came in at 4.8% at the end of 2022, which is 65.5% higher than the amount of space available at the end of 2021, when the availability rate was 2.9%.
Total vacancy this quarter registered 2.6%, with 2.3% direct and 0.3% sublet. Sublet space has increasedfrom 9.2 million square feet at the end of 2021 to 13.1 million square feet at the end of 2022.
Investment sales volume increasedby 26.7% when compared to 2021. Total sales volume in 2021 was $6.05 billion dollars and 2022 came in at $7.66 billion. We also witnessed the price per square foot increase by 18.4% in 2022.
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