Strasmann: Closer is better. In infill areas, due to a lack of quality available space—industrial vacancies in Los Angeles and Orange County are below 2%—companies need to secure locations and thus will take the best options available. In a perfect world, they would want the highest-end buildings that fit their model, but in most cases within our region—in L.A. and Orange County, less than 10% of existing product is considered class A—they have to make do with the next best option. In my opinion, this is a big win for well-located class-B space, which is more abundant within infill locations.

GlobeSt.com: What will be the key issues for fulfillment space over the next few years?

Strasmann: Finding great locations that can accommodate business operating models and provide the fastest delivery time to the end customer at an acceptable cost will be the key issues over the next few years. In a nutshell, everybody is attempting to have a best-in-class supply-chain network that gives them a competitive advantage over direct and indirect competitors.

GlobeSt.com: What else should our readers know about fulfillment space in Orange County?

Strasmann: We are only in the beginning stages with lots of growth. This fact will drive more and more business for industrial owners in years to come.

NEWPORT BEACH, CA—The big fulfillment spaces first started in the Inland Empire, but these types of operations are now expanding across all infill areas, CBRE's managing director of Orange County operations Kurt Strasmann tells GlobeSt.com. The firm recently reported that year-to-date, e-commerce-related demand accounts for 37% of total activity, representing a sizeable portion of total transacted square footage. For transactions greater than 100,000 square feet, e-commerce/e-fulfillment-related deals account for an even larger portion, representing 57% of transacted square footage. We spoke exclusively with Strasmann about what fulfillment space looks like in Orange County and how users' needs for this space are changing.

GlobeSt.com: How are the characteristics of fulfillment space in Orange County changing?

Strasmann: The big fulfillment spaces first started in the Inland Empire, but these types of operations are now expanding across all infill areas. In Orange County, for example, these types of facilities aren't strictly 100% fulfillment but also feature various e-commerce components. The key for companies is to always understand how to reach their customers efficiently while maintaining a cost-service balance.

GlobeSt.com: What's changing about users' needs for this space, particularly with last-mile delivery becoming more and more crucial?

Strasmann: Closer is better. In infill areas, due to a lack of quality available space—industrial vacancies in Los Angeles and Orange County are below 2%—companies need to secure locations and thus will take the best options available. In a perfect world, they would want the highest-end buildings that fit their model, but in most cases within our region—in L.A. and Orange County, less than 10% of existing product is considered class A—they have to make do with the next best option. In my opinion, this is a big win for well-located class-B space, which is more abundant within infill locations.

GlobeSt.com: What will be the key issues for fulfillment space over the next few years?

Strasmann: Finding great locations that can accommodate business operating models and provide the fastest delivery time to the end customer at an acceptable cost will be the key issues over the next few years. In a nutshell, everybody is attempting to have a best-in-class supply-chain network that gives them a competitive advantage over direct and indirect competitors.

GlobeSt.com: What else should our readers know about fulfillment space in Orange County?

Strasmann: We are only in the beginning stages with lots of growth. This fact will drive more and more business for industrial owners in years to come.