CORFAC News

CONTACT:  Art Ansoorian (805) 653-1648

Torrance, CA (February 11, 2013) – Availability of industrial building space in a representative submarket of L.A. Metro’s South Bay area continues to decrease after total square footage leased or sold topped five million square feet in 2012 for the first time since 2004, according to a year-end 2012 report issued by The Klabin Company/CORFAC International.

David Grote, a partner in the Torrance, CA office of Klabin/CORFAC and author of the study, said the fourth quarter of last year was the sixth consecutive quarter of decreases in total space in the key Carson/Rancho Dominguez and 91 Freeway Corridor submarket.  He reported that the submarket’s vacancy rate now stands at 3.1 percent, down from 7.1 percent in the second quarter of 2011.  Grote underlined that the region’s low vacancy rate is having a significant impact on lease and sale rates. 

“Lease rates firmed in the first half of 2012 and increased in the last half.  With this low level of vacancy we expect rates to continue an upward trend.  Sale prices have increased at a faster rate than lease rates, fueled by a low supply of buildings and low interest rates,” Grote said.

He explained that the Carson/Rancho Dominguez and 91 Freeway Corridor submarket encompasses approximately 20 percent (52 million square feet) of the overall South Bay market, which he said is a large enough sample to be representative of the total market.

Other key data in Grote’s study included:

• Total space on the market (occupied and vacant) dove from 8.2 percent in the third quarter of 2012 to 6.6 percent at the close of the fourth quarter.
• Square feet leased or sold rose from 1.04 million square feet in the third quarter to 1.5 million in the last quarter.
• Net absorption (the net differential of total square footage leased/sold and the total square footage vacated or newly built) decreased from 534,588 square feet in the third quarter to 284,271 square feet in the fourth quarter.

Among notable transactions during the fourth quarter, Grote reports, was a 215,635 square foot sale to Tri Modal Transportation at 18626 S. Reyes Ave. and a lease of 143,937 square feet to DHL Global Mail at 921 W. Artesia Blvd.

About The Klabin Company/CORFAC International
Now in its sixth decade, The Klabin Company/CORFAC International is ranked among the top 20 commercial real estate companies based in Los Angeles.  The firm has offices in Los Angeles and Torrance, and is affiliated with CORFAC International.  For more information go to www.klabin.com.

About CORFAC International
CORFAC International (Corporate Facility Advisors) is comprised of privately held entrepreneurial firms with expertise in office, industrial and retail real estate leasing and investment sales, multifamily property acquisitions and dispositions, property management and corporate services.  In association with FIABCI (the International Real Estate Federation) and global affiliates, CORFAC International offers commercial real estate services with market reach in 65 countries worldwide.  In recent years, CORFAC firms have averaged over 8500 completed transactions annually totaling more than 600 million square feet worth in excess of $52 billion for their customers.  For more information on the CORFAC network, contact (703) 532-6160 or visit www.corfac.com.