///////////////////////////////////////// ///////////////Los Angeles ///////////// ///////////////////////////////////////// ///////////Orange County /////////// ///////////////////////////////////////// ////////////Ventura ///////////////// ///////////////////////////////////////// ////////// Inland Empire //////////// ///////////////////////////////////////// //// /////Phoenix ///////////////// ///////////////////////////////////////// Q1 | 2020 Market Report ///////// Los Angeles Industrial Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L LA North
Transcript
/////////////////////////////////////////
///////////////Los Angeles/////////////
/////////////////////////////////////////
///////////Orange County ///////////
/////////////////////////////////////////
////////////Ventu ra/////////////////
/////////////////////////////////////////
////////// I n land Empi re ////////////
/////////////////////////////////////////
//// /////Phoen ix/////////////////
/////////////////////////////////////////
Q1 | 2020
Market Report ///////// Los Angeles Industrial
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has
not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted
subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
LA North
/////////////////////////////////////////
KEY TAKE AWAYS MARKET ACTIVITY ECONOMIC OUTLOOK
Direct Vacancy
D
Net Absorption
Overall Vacancy
V
Gross Absorption
Under Construction
Sale Price Change
Rental Rates (NNN)
Deal Volume
U.S. Employment U6 Rate
Interest Rate Changing GDP
Port Traffic Y/Y Δ NYSE Performance
Inflation Change 10 Yr. - 2 Yr. Spread
MARKET
REPORT
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
EXPERIENCE IN A CHANGING MARKET
@DAUMCOMMERCIAL
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be
implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other condi tions, prior sale, lease or financing, or withdrawal without notice.
2.3% -173,209 SF
2.5% 1,362,700 SF
2,278,222 SF
5.7%
$1.12
21.5%
MARKET
REPORT Q1 Industrial 2020 Los Angeles North
MARKET
• Vacancy Rate: Increased 10 BPS in Q1.
• Net Absorption: Continues to be negative.
• Industrial Supply: A new development broke
ground in Burbank adding much needed supply to
the SFV.
• Asking Rents: Ticked up by $0.04 PSF.
• Sales: Pricing in the LA North market continues to
rise. Volume in Q1 fell by over 21%
ECONOMIC OUTLOOK
• Interest Rates: In response to COVID-19 the Fed acted urgently to cut their Fed Funds rate to a range
of 0-0.25%.
• GDP: It is a near consensus that the U.S. & the world are in the midst of a recession caused by COVID-19. The length and severity of this recession is entirely dependent on how fast COVID-19 can be contained.
• Economic Relief : On 3/27, the $2.2 Trillion CARES Act was signed into law. An impactful part of CARES provides forgivable loans to small businesses to cover
payroll & other expenses like rent & utilities. Business
must retain their employees to have these loans
forgiven by the government.
4.4% 8.7%
3.5% (30 year fixed) -1.3%
-11.7% -19.1%
2.3% 47 BPS
///////// Market Report
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no
express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental
or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
L.A
. N
ort
h |
In
du
stria
l ///
/ Q
1 2
020
Q1OVERALL VACANCY
INCREASED BY 10 BPS FROM Q4
GROSS ABORPTION
TICKED UP IN Q1. REMAINS BELOW HISTORIC AVERAGE
NET ABSORPTION
DIRECT NET ABSORPTION SLIPPED TO ROUGHLY -170K SF
ASKING RENTS
ROSE BY $0.04 PSF TO $1.12 PSF NNN
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
Direct Vacancy Total Vacancy Historical Average
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
(1,500,000)
(1,000,000)
(500,000)
0
500,000
1,000,000
1,500,000
2,000,000
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
Net Absorption SF Direct Overall Vacancy
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0Gross Absorption SF Total Historical Average
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.90
$1.00
$1.10
$1.20
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
NNN Rent Direct Overall Vacancy
///////// Market Report
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no
express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental
or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
L.A
. N
ort
h |
In
du
stria
l ///
/ Q
1 2
020
CONSTRUCTION ACTIVITY
NEW DEVELOPMENT IN BURBANK BROKE GROUND IN Q4
LEASING ACTIVITY
PICKED UP IN Q1 TO JUST BELOW 1.8M SF
SALES
PRICES INCREASED TO A MEDIAN OF $254.48 PSF IN Q1
Q1
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
Leasing Activity SF Direct Leasing Activity SF Sublet
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
Under Construction SF
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
200
12
00
22
00
32
00
42
00
52
00
62
00
72
00
82
00
92
01
02
01
12
01
22
01
32
01
42
01
52
01
62
01
72
01
82
01
92
02
0
Sales Volume Med. Price PSF
///////// Market Report
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no
express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental
or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
L.A
. N
ort
h |
In
du
stria
l ///
/ Q
1 2
020
VACANCY BREAKDOWN SQUARE FOOT BREAKDOWN– 165,898,204 SF MARKET SIZE
VOLUME BREAKDOWN AVERAGE ASKING RENT PSF NNN AT CLOSE OF QUARTER
Q1
6% 2%
15%
50%
27%Antelope Valley
Conejo Valley
Santa Clarita Valley
SFV-East
SFV-West1.9%
5.1% 4.8%
1.5%2.2%2.0%
5.9%
5.2%
1.8%2.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
Antelope
Valley
Conejo
Valley
Santa Clarita
Valley
SFV-East SFV-West
Direct Vacancy Rate Overall Vacancy Rate
$0.78
$1.57
$0.87
$1.32
$1.06
$0.00
$0.20
$0.40
$0.60
$0.80
$1.00
$1.20
$1.40
$1.60
$1.80
Antelope
Valley
Conejo
Valley
Santa
Clarita
Valley
SFV-East SFV-West
Average Industral Rent NNN
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
$0.00
$20,000,000.00
$40,000,000.00
$60,000,000.00
$80,000,000.00
$100,000,000.00
$120,000,000.00
Sales Volume Price PSF
///////// Market Report
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no
express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental
or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
L.A
. N
ort
h |
In
du
stria
l ///
/ Q
1 2
020
METHODOLOGY
& TERMINOLOGY
Methodology
Industrial and flex (R & D)
buildings that are 5,000 square
feet and greater.
Direct Vacant SF
Space that is vacant and ready
for occupancy by a user. The
space is being offered for lease
or sale directly from the landlord.
Total Vacant W/ Sublet SF
Space that is vacant and ready
for occupancy by a user. The
space is being offered for lease
or sale by the landlord or for
sublease by the current tenant.
Direct Vacancy Rate
Total vacant direct space
(vacant space for lease or sale
from the landlord or owner)
divided by the total rentable
square footage for existing
buildings only.
Vacancy W/ Sublet Rate
Total vacant direct space and
sublease space divided by the total rentable square footage for
existing buildings only.
Gross Absorption
The total change in occupied
space over a given period of
time, counting space that is
occupied but not space that is
vacated by tenants. Gross
absorption differs from leasing
activity, which is the sum of all
space leased over a certain
period of time.
Net Absorption
The net change in occupied
space over a given period of
time, calculated by summing
all the positive changes in
occupancy (move ins) and
subtracting all the negative
changes in occupancy
(move outs).
Under Construction
Planned buildings for which
construction has started but
have not yet been granted
a Certificate of Occupancy.
Planned buildings are
not included.
Completed in 2019
New buildings with original
construction completed in
the year 2019 and granted
a Certificate of Occupancy.
Renovated buildings are
not included
LOS ANGELES, CALIFORNIA
801 S. Figueroa Street, Suite 600
Los Angeles, CA 90017 213-626-9101
LOS ANGELES NORTH, CALIFORNIA
21820 Burbank Boulevard, Suite 201
Woodland Hills, CA 91367
818-887-3600
SANTA CLARITA VALLEY, CALIFORNIA
28494 Westinghouse Place, Suite 312
Valencia, CA 91355
661-705-2299
SAN GABRIEL VALLEY, CALIFORNIA
13181 Crossroads Pkwy. N, Suite 100
City of Industry, CA 91746 562-695-7244
SOUTH BAY, CALIFORNIA
1025 W. 190th Street, Suite 420
Gardena, CA 90248
310-538-6700
MID-COUNTIES, CALIFORNIA
13810 Cerritos Corporate Drive, Suite C
Cerritos, CA 90703
562-207-3300
ORANGE COUNTY, CALIFORNIA
4400 MacArthur
Boulevard, Suite 950 Newport Beach, CA 92660
949-724-1900
VENTURA & SANTA BARBARA, CALIFORNIA
751 Daily Drive, Suite 105 Camarillo, CA 93010
805-987-8866
INLAND EMPIRE, CALIFORNIA
3595 E. Inland Empire Boulevard, Bldg. 5
Ontario, CA 91764
909-980-1234
PHOENIX ARIZONA
1702 E. Highland Avenue, Suite 120
Phoenix, AZ 85016
602-957-7300
DAUM OFFICES
Q1
/////////////////////////////////////////
///////////////Los Angeles/////////////
/////////////////////////////////////////
///////////Orange County ///////////
/////////////////////////////////////////
////////////Ventu ra/////////////////
/////////////////////////////////////////
////////// I n land Empi re ////////////
/////////////////////////////////////////
//// /////Phoen ix/////////////////
/////////////////////////////////////////
Economic Overview
///////// Q1 2020
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has
not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted
subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
Na
tio
na
l Ec
on
om
ic O
ve
rvie
w //
// Q
1 2
02
0
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no
express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental
or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
Q1
*-1.3% for 1Q20 based on CNBC/Moody’s Analytics Rapid Update Survey
PORT ACTIVITY FELL BY 7.6% FROM Q3. SHARP DECLINE EXPECTED IN Q1-20 GDP IN Q4 FINISHED AT 2.1%. Q1 2020 ESTIMATE IS -1.3%
THE IMPACT FROM COVID-19 BEGINS TO SHOW LEISURE & HOSPITALITY HIT HARD DUE TO SHUTDOWNS FROM COVID-19
Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no
express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental
or other conditions, prior sale, lease or financing, or withdrawal without notice.
www.daumcommercial.com | O N C O R I N T E R N A T I O N A L
Q1
10-2 YEAR BOND SPREAD INCREASED AS NEAR-TERM PROSPERITY DECLINES Q1 WAS ONE OF THE WORST QUARTERS IN HISTORY
CPI JUST ABOVE 2% TARGET AT 2.32% THE FEDERAL RESERVE CUT THE FED FUNDS RATE TO 0.0-0.25%
