How Is Industrial Real Estate Today?

How Is Industrial Real Estate Today?

Posted on by Jim Klein
Map showing electrical symbol for buildings with increasing size based on building
Power Map of Buildings In LA County

Industrial real estate is a diverse business that includes Investment funds, developers, private/family owners, corporations, occupiers, and a mix of product types and industries. Industrial buildings are in every community and are the source of employment, production, distribution, and wealth for many. The nation’s economic health rides on the success of industrial real estate.

There are several factors that are driving deals today. Broadly, these include Interest Rate Policy, US Industrial Strategy, and Local Municipal Governance. Everyone is affected differently. For example, higher interest rates are never good for real estate, though they affect sales more than leases; sale transactions are interest rate sensitive while leasing is supply and demand based. As an experienced broker, we use detailed knowledge, market analytics, and long-standing relationships to help you in making the best decision.

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New Gardena Industrial Commentary

New Gardena Industrial Commentary

Posted on by Jim Klein


The geography of Gardena needs explanation. There is the City of Gardena proper and three times larger than the city boundary, is the Gardena Postal Zone. The larger Gardena area includes parts of Unincorporated Los Angeles County (West Rancho Dominguez), City of Los Angeles Strip, and the northwestern part of Carson. The zip code 90061 is also included in most market studies of Gardena because it squares off the uniform industrial portion of West Rancho on the north side. When someone asks me how the real estate business is in Gardena, it depends where you are located. Each municipality has its own zoning regulations and homeless policies which have a direct relationship to the individual parcel value.

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Three Innovations for 2023

Three Innovations for 2023

Posted on by Jim Klein

ChatGPT:

I could not start the year without acknowledging the tools that are currently available at Open AI. I’ve recently created a new FAQ page with the use of ChatGPT and Dall-E 2. It must have been under the wire before Google Search created new defenses against text bots. I received one solid lead from a company looking for 30,000 square feet because of the AI-generated explanation of my services.

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Stricter Underwriting is Here – Industrial Policy is a New Catalyst

Stricter Underwriting is Here – Industrial Policy is a New Catalyst

Posted on by Jim Klein

For the past several years, and particularly during the COVID-19 Period, conventional underwriting took a back seat to momentum. No one’s pro-forma predicted the incredible rent growth over this period. Low interest rates and shortage of product drove prices higher. Industrial rents doubled in two years. Underwriting was limited to the simple and liberal measurement of Net Rent/Purchase Price = Rate of Return. Any return higher than treasury rates signaled a buy. It was the period of “Search for Yield”.

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Recent Observations: Real Estate Trends

Recent Observations: Real Estate Trends

Posted on by Jim Klein

postcard with SQFT text

Observations of Industrial Real Estate Trends

Real Estate Trends – The Good

Intense industrial real estate trends and conditions are diminishing. There are fewer container ships waiting to unload. The cost to ship a container from Shanghai to Los Angeles is 30% lower from its high. Building rents are still increasing but the doubling during the Covid-19 period was an aberration. While signs of a hyper-market are departing, a strong industrial market remains. There is a deficit of available space, strong corporate demand to improve supply chains and manufacturing resiliency, e-commerce, and high investment flow. Rent surges will continue with holiday stocking schedules starting in the Summer and again later in the year when China re-opens from its Covid-19 lockdown.
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2022 Continues – Severe Space Shortages

2022 Continues – Severe Space Shortages

Posted on by Jim Klein

potential 240,000 square foot lease deal near LAX

Acute space shortages are national news. Not only here in Los Angeles, where it’s about the worst, but all over the United States. Many tenants are being caught short and others are taking space far in advance, at greater amounts, and at much higher cost. Price bidding leads landlords to weigh credit, use, and history. Credit is the most important enhancement because it notably increases the value of buildings. Larger landlords also favor tenants that will lease multiple buildings across their national holdings.
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2021 Remains an Unbalanced Industrial Market

2021 Remains an Unbalanced Industrial Market

Posted on by Jim Klein

The industrial property business has grown from a real estate niche serving mostly large corporations and owner/users to a favored investment of large institutions. The rise coincided with the great manufacturing upheaval of shuttered plants as companies shifted production offshore. Goods return in containerized shipments and begat the new industry of logistics. The result was increased liquidity of both goods and capital. A situation that is ideal for warehouse development and investment. Today’s industrial marketplace is made up of global and national 3pls, shipping companies, e-commerce, and on the capital side, Industrial REITS, large investment funds, and a handful of developers. The Covid Supply Chain phenomena and an increase in tariffs has compounded an already unbalanced space market to acute levels
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Commentary on Industrial Markets

Commentary on Industrial Markets

Posted on by Jim Klein

Week of June 25 – Need For Space

The industrial market during the Covid-19 period, now edging back to normality, is a lesson on disruption. The most visible example are container ships backed into the sea and unable to unload goods because there is not enough dock space available at the ports. It is the same at warehouses and container yards: too many products and not enough space.
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