Your Commercial Real Estate Source in the San Francisco Bay Area
By Natalie Dolce
GlobeSt.com exclusively chatted with three executives at Voit Real Estate Services throughout the Orange County-based firm’s western region on a recurring description that has emerged across most markets… “Slow and steady.”
Are markets improving? “Slow and steady.”
Are values rising? “Slow and steady.”
While economic fundamentals continue to improve in this same manner, the experts we spoke with say there is one sector of the market that appears to be outpacing the rest—industrial.
“We’re past the low point in the industrial market, and we’re on our way up,” explains Kevin Higgins, anEVP in Voit’s Las Vegas office. “The good news is, the upswing will be very sharp.”
Higgins notes that even in Las Vegas, where recovery was slower than many other areas of the country, the industrial market is now demonstrating its resilience.
“Values are rising, and with healthy demand from tenants in the market, industrial investors are now willing to pay more for properties in Las Vegas than they were over the past few years,” he said.
With this willingness comes an increase in activity, according to Higgins, who said that investors are moving quickly to take advantage of ongoing low interest rates and the relative affordability of product in this market.
“New investors and investment companies have been entering the market, many from the Southern California marketplace, which is a strong driver for Las Vegas,” he explains.
In addition, Higgins notes that many large companies have emerged as buyers in Las Vegas, including Blackstone, Prologis, Oaktree, and Hines, among others.
“Confidence is growing throughout the industrial sector, which will contribute to the increasing speed at which the market will improve,” Higgins says.
Growing confidence is also evident among industrial tenants in the San Diego market, according to Randy LaChance, a SVP in Voit’s San Diego office.
LaChance explains that growth in the housing industry, as well as in niche industries such as craft brewing, is boosting demand for industrial tenant expansion in San Diego.
“Tenants are aware that the San Diego industrial market is in the process of converting to a landlord’s market,” he explains. “For that reason, many tenants are seeking out longer-term leases and working to secure industrial space now.”
LaChance notes that, based on the high cost and low availability of land, new industrial construction will be extremely limited in San Diego.
Read entire GlobeSt article here.