The industrial product in Los Angeles is aging. According to new research from CBRE, the average age of industrial buildings in infill Los Angeles is 39 years, and these buildings are not equipped to handle the needs of ecommerce tenants today. Redevelopment is a solution to the problem, but its takes time and, with the tight industrial supply, there are limited redevelopment opportunities. To find out more, we sat down with Kurt Strasmann, executive managing director at CBRE. Here, we talk about the aging industrial stock, why it has been challenging to redevelop and what features ecommerce users are looking for.

GlobeSt.com: Why has it been challenging to build or redevelop warehouse product in Los Angeles?

Kurt Strasmann: Los Angeles is an infill location, which means that most areas are built-out already. Secondly, most of the inventory stock was constructed 30 to 40 years ago and designed for a different industrial sector. L.A. was originally a thriving manufacturing-based economy, thus the buildings at the time were designed and erected with different features aligned with the manufacturing process. These type of features include heavy power, ground-level doors, typically lower ceiling clearance, etc. Today's primary demand is warehousing for distribution and fulfillment. In order to redesign or re-develop these existing buildings, it is often just easier and more efficient to start from scratch. Also, some California regulations add additional challenges in terms of time and cost, the supply of available assets are severely limited due to exceptionally low availability rates, plus the demand for any industrial product from existing users and lastly other product-type investors have outbid industrial developers for opportunities, for example residential. When you combine all these elements it becomes very challenging to find and execute on any opportunity.