Intelligent Investment
Southern California on Sale: Industrial & Logistics Perspective
February 29, 2024 5 Minute Watch
Summary
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- Activity
High Broker Opinion of Value activity points to an active second half. Core funds with fixed investment time horizons are selling. Private equity investors are realizing gains on properties they have held long term and are now redeploying that capital into what they see as a buying opportunity. - Good News for Southern California Industrial & Logistics Fundamentals
Despite shifting trade patterns and an uptick in East Coast imports, there is good news on fundamentals in Southern California. The ports of Los Angeles and Long Beach are outperforming expectations. We also are seeing more product arriving to the West Coast, for a few key reasons: first, the drought in the Panama Canal; second, the crisis in the Suez Canal; third, the threat of a longshoremen strike at East Coast terminals; and finally, strong holiday retail sales. - Market perspective
Historically, Southern California has traded at a premium, but the region is now trading in line with the rest of the country. That means Southern California is on sale right now. When interest rates fall, cap rates are going to compress. Bidding activity has picked up among several groups that see the change coming and are going deep into the market to take advantage of this excellent buying opportunity.
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National Partners
CBRE National Partners is the leading industrial and logistics investment sales and finance platform with 98 team members located in the most strategic markets across the U.S., with access to investors across the globe.
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Industrial & Logistics
From purchasing or selling an asset, financing, property diagnostics, positioning, marketing and leasing to management and reporting, our complete platform of services gives us unparalleled ability to serve our clients through the entire real estate lifecycle.
The U.S. industrial market is expected to stabilize in 2024, with net absorption on par with 2023 levels and taking rent growth moderating to 8%.
The Greater Los Angeles, Orange County, and Inland Empire (GLA/OC/IE) region remained the second-most populated metro area in the U.S. with 18.4 million residents.