September 13, 2019
By Dennis Kaiser
JLL recently hired a pair of Los Angeles-area industrial experts, Rustin Mork and Danny Reaume (pictured above), as Senior Vice Presidents. The team specializes in the San Gabriel Valley and infill Los Angeles. Connect Media asked Reaume to share his thoughts on the San Gabriel Valley market and what makes it a compelling opportunity from a commercial real estate perspective in our latest CRE Q&A.
Q: What is driving industrial occupiers to the San Gabriel Valley market?
A: We see tenant migration from Los Angeles’ South Bay and Central submarkets to the San Gabriel Valley to secure more functional industrial facilities at a more affordable rate, all while staying close to the dense consumer base that Los Angeles offers.
Q: What does the future hold for the San Gabriel Valley industrial market?
A: The future for the San Gabriel Valley is bright. With limited land and a vacancy rate below 2%, we see continued rent growth and demand from institutional investors who believe in the San Gabriel Valley as an L.A. infill market they want in their portfolios. We continually see Class A facilities pre-leased prior to construction being completed, again proving the occupier demand is strong.
Q: What are some things that industrial occupiers and investors don’t know about the San Gabriel Valley market?
A: The amount of construction, current and planned, is enormous. With Majestic Realty’s Grand Crossing project in the City of Industry, and multiple other “big box” developments going vertical in Irwindale, we will see a significant amount of Class A facilities coming to market in the next 12 to 24 months. That said, it will still remain a cost alternative to the South Bay, and boast drayage relief as it relates to the Inland Empire market. It’s truly a great infill L.A. location for last mile facilities.
Q: How does it compare to other Southern California industrial markets?
A: The San Gabriel Valley submarket is a transpacific trade corridor of Los Angeles, and houses many Chinese import/export businesses, with food and beverage, logistics, furniture, electronics and footwear representing prevalent industries. That said, the tenants are becoming more sophisticated, and the new Class A product being delivered to the market is reflecting this shift. As opposed to the Inland Empire and L.A.’s South Bay & Central submarkets, regional owners dominate the core inventory of properties ranging between 30,000 to 100,000 square feet. A majority of total inventory is based in the City of Industry. It remains an affordable, highly-functional submarket within the dense L.A. population base, and as infill supply chains mature, the San Gabriel Valley provides critical options for ‘micro-spoke’ distribution facilities.
For comments, questions or concerns, please contact Dennis Kaiser