Blog #carson

Southbay Submarket Key Highlights (Download Report for Midcounties, Central & Inland Empire Submarkets)

• Vacancy/Availability
  • Vacancy rate in Q4 2024 increased to 5.2%, up 80 basis points from Q3 and 130 basis points year-over-year.
  • High-end properties linger on the market for an average of 7.2 months, giving tenants more leverage in negotiations.
  • Total vacant available space expanded to 10.4 million square feet by the end of Q4.
• Rental Rates
  • Average asking rents fell 1.2% ($0.02) quarter-over-quarter and 8.9% ($0.16) year-over-year.
  • South Bay rents increased 34.1% between Q4 2020 and Q4 2024, reaching $1.63 NNN per square foot.
  • Only 76 lease transactions were completed in Q4, well below the historical quarterly average of 105 transactions.
• Construction
  • 1.37 million square feet under construction across 10 buildings in South Bay.
  • Two new buildings totaling 263,060 square feet were added in Q4 2024.
  • None of the 10 ongoing projects, including six exceeding 100,000 square feet, have been pre-leased, posing risks of higher vacancy rates.
• Leasing Activity/Absorption
  • Net absorption in Q4 2024 was -1.47 million square feet, continuing a negative trend since Q4 2022 (except for Q3 2023 and Q3 2024).
  • New leasing activity totaled 1.19 million square feet, well below the long-term quarterly average of 2.59 million square feet.
  • Average time to lease a building in South Bay increased to 6.4 months.
• South Bay Submarket: Top Leases in Q4 2024
  • 2027 Harpers Way, Torrance: Virco Manufacturing, 10/01/24, 559,000 SF.
  • 24760 S. Main St., Carson: DCW, Inc., 10/22/24, 231,008 SF.
  • 250 W. Manville St., Compton: Kair Harbor Express, 10/01/24, 206,483 SF.
  • 2230 E. Carson St., Carson: JAM-N Logistics, 10/01/24, 198,292 SF.
  • 18111 S. Santa Fe Ave., Rancho Dominguez: Air Products Manufacturing LLC, 10/01/24, 136,980 SF.
• Sales Activity/Investment Trends
  • Q4 2024 sales volume reached $375 million across 14 transactions, up from $163 million in Q4 2023.
  • Average price per square foot rose 36% quarter-over-quarter and 15.6% year-over-year, reaching $386.48.
  • Capitalization rates increased 160 basis points to 6.0%.
  • The Federal Reserve cut rates by 100 basis points in 2024, with further cuts expected in 2025.
  • Investor activity remains cautious amid policy uncertainties.
• South Bay Submarket: Top Sales in Q4 2024
  • 2501 Rosecrans Ave., Los Angeles: Rexford Industrial Realty, Inc., 12/06/24, 300,201 SF.
  • 18500 Crenshaw Blvd., Torrance: Gpjco Properties LLC, 12/05/24, 180,269 SF.
  • 2550 El Presidio St., Carson: Caroline Tseng, 10/31/24, 130,055 SF.
  • 15914 S. Avalon Blvd., Compton: Access Services, 12/02/24, 75,431 SF.
  • 14455 S. Broadway, Gardena: Aleah Miller, 11/27/24, 58,723 SF.

Available: ±182,746 SF / ±4.2 acres of Land

Price: $9.8M

Zoning: Commercial Automotive

APNs: 7315-012-002, & 7315-012-804

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The Los Angeles industrial real estate market is one of the most active and sought after in the United States. It is a diverse market, ranging from smaller facilities to large, modern distribution centers. The demand for industrial space in Los Angeles has remained strong due to the city's strategic location, growing population, and thriving economy. The Los Angeles industrial real estate market has also benefited from the rise of e-commerce, as online shopping has led to an increased demand for warehouse and distribution facilities. While the COVID-19 pandemic has had an impact on many industries, the industrial sector has remained resilient, with strong leasing activity and a stable vacancy rate. Overall, the Los Angeles industrial real estate market presents many opportunities for investors, developers, and tenants alike. 

The Los Angeles industrial real estate market in the fourth quarter of 2022 was strong, with robust demand and limited supply leading to higher rental rates and lower vacancies. The e-commerce sector continued to drive demand for warehouse and distribution space. Overall, the market was characterized by a favorable balance between supply and demand, with positive outlook for the future.

The shortage of warehouse and industrial space available for lease and sale persisted in the 1st quarter of 2021.  The continued rise of e-commerce has led to demand for industrial space to outstrip supply. Additionally, low interest rates have led to the average sale price to increase by... CLICK BELOW FOR FULL REPORT

While the Office and Retail sectors struggled in Commercial Real Estate, Industrial thrived.  Inventory decreased and e-commerce continues to drive the hot Industrial and Warehouse segments.