L.A.-area industrial, office markets ''rebound'' after worst period in history, study shows.
Unveiling SIOR's ``Comparative Statistics of Industrial and Office Real Estate Markets,'' officials of the society's Greater Los Angeles Chapter report that California's nation-leading job growth -- 285,000 new jobs created over the last 12 months -- played a significant role in the improved industrial and office markets statistics.
``Comparative Statistics'' reviews and forecasts industrial and office activity in 129 industrial and 122 office markets nationwide. Market data was compiled by a select group of SIOR members in major metropolitan areas in the United States and abroad.
David Prior, SIOR, president of the local society chapter and president of The Klabin Co. of Los Angeles, reported that ``Comparative Statistics'' shows that office-property vacancies nationwide in 1996 slipped below the teens for the first time in a decade, down 2.1 percent from 1995.
The industrial sector also saw improvement, with vacancies declining to 7.1 percent in 1996 from 7.6 percent the previous year.
Accordingly, the study reveals, construction activity ``is starting to gather momentum in many of the industrial and office markets surveyed by SIOR.''
Since 1992, the study continues, the U.S. industrial real estate market has seen the amount of space dedicated to research, production and distribution increase by 400 million square feet.
``Manufacturing, distribution, research and service sectors of the economy are finding that appropriate facilities are increasingly difficult to find and more expensive than anticipated. This applies to Greater Los Angeles,'' Prior said.
Citing the ``dynamic recovery of the industrial base in L.A.'s suburbs,'' the study shows that the eastern portion of Los Angeles County and the San Fernando Valley pace those industrial areas that have bounced back, with occupancies of 95 percent or more.
However, while California's new economic vitality ``is the year's most significant story,'' office vacancy still stands at 12.5 percent, one of the weakest regions surveyed by ``Comparative Statistics.''
Los Angeles submarket forecasts for 1997 by ``Comparative Statistics'' include:
-- L.A. Central -- Further tightening in the industrial sector;
accelerating office leasing. ``But years away from new office
development.'' Some limited new industrial development
-- L.A. East -- A surge of new industrial development;
acceleration in office demand, with a rise in rental rates.
-- San Fernando Valley -- Lease-rental gains of 5 percent for
all industrial categories, with accompanying price gains;
rents won't support new office development, but build-to-
suits under way.
-- San Gabriel Valley -- Demand for leased facilities in the
160,000-square-foot-and-up range strong, with little
inventory available; significant increases in lease rates.
Further expansion of office demand, with few blocks of 10,000
square feet available.
-- South Bay -- ``Spec'' industrial building anticipated in view
of Class A space deficiency; highest office-vacancy rate in
nation, but outlook improved from ``grim 1996.''
Entertainment firms sparking pickup.
-- Westside -- Diversifying industrial profile paced by
entertainment-related, animation, post-production, software
and communications users.
SIOR is the nation's premier professional industrial and office real estate network. The 1,300 SIORs that have been awarded the SIOR designation, along with more than 500 affiliate and associate members, form an elite global network of more than 1,000 offices in 350 cities in the United States and abroad.
CONTACT: Society of Industrial and Office Realtors
David Prior, 310/329-9000
Ansoorian and Associates
Art Ansoorian, 818/881-1183
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|Date:||Jan 28, 1997|
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