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New Sweet Spot Emerges in SoCal Industrial
Even as the growth of e-commerce has lifted the entire industrial and logistics real estate sector, a sweet spot has emerged: warehouses smaller than 120,000 square feet, according to a new report from CBRE.
“The bulk of transactions in the Greater L.A. and Southern California region takes place in the 100,000 square-foot space and below,” said Kurt Strasmann, executive managing director of CBRE’s Orange County and Inland Empire Operations, as well as CBRE’s Southern California functional industrial & logistics market leader. “It’s just the nature of our market and overall vacancy in that segment is a mere 1 to 2%.”
Generally speaking, light industrial has performed exceptionally well and typically gets leased up fairly quickly by a variety of users, notes Strasmann. The reason why he says is “Because it’s all about proximity. Closer is better in today’s world. Speed is a competitive advantage, whether it is about the ease with which your employee base can commute to you or whether it is about the speed with which you deliver your product.”
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