Looking to lease industrial real estate in Los Angeles? Long story short – welcome to the extensive waiting list of other businesses all seeking similar solutions for their space needs.
The L.A. vacancy rate is more than 5% below the national average, sitting at 1% or lower in most submarkets. The limited inventory of available industrial space that does actually see the market is also evaporating rapidly.
With no substantial change to market fundamentals on the horizon, decision makers will be faced with serious challenges in the coming year. Here are four (4) recommendations to consider before pursuing a new lease in today’s fast paced marketplace:
#1 Lean on Existing Relationships
Today, who you know can have more of a positive impact than what you know. Being acquainted with the right players in the commercial real estate industry can help raise awareness to off market opportunities and advanced lead time to act.
In Los Angeles, warehouse and manufacturing spaces are mostly spoken for. With this in mind, taking advantage of existing relationships is critical to your success. If you don’t have the right contacts in place, make sure your real estate broker does (and don’t be afraid to ask them the hard questions, verifying their experience, references and recent transaction history).
#2 Examine Efficiencies
Creative solutions are often readily available when identifying efficiencies becomes a focused pursuit. Consider engaging a racking consultant, space planner and/or architect that can analyze your business and its current operations.
Time and time again, we find that an outside set of professional eyes can deliver a unique perspective. Be open minded to changing processes, systems and innovation. It may be that your business can actually do more with less and not have to relocate at all – or at least for the foreseeable future until more viable choices become available.
#3 Consider Alternative Locations
The mixed-use craze in recent years has resulted in millions of rezoned square footage that is no longer considered industrial. However, there are still alternative markets available if relocation is a possibility – each offering a variety of product and pricing.
If you maintain flexibility and can expand your search beyond the core L.A. market, explore all reasonable options. It is not uncommon for brokers to run a comparative analysis across multiple regions – ranging from L.A., Inland Empire to Phoenix – and targeted cities within each. Having options will reduce the pressure and potential to make a rushed decision – and in the process, costly mistakes.
#4 Start Early
Start early – extremely early. With L.A. breaking records for fast moving industrial space, settling for a short term stay is not necessarily the smartest move. Businesses must start proactive discussions about renewal vs. relocation as much as a year in advance of their lease expiration. Don’t assume that your landlord will be patiently waiting for you or that others aren’t aware that your lease is coming to term.
Want to know more about your search for industrial real estate? Feel free to connect with our team to learn how we are successfully helping our clients in today’s highly competitive landscape.