GlobeSt.com: Do you see this yield changing in the foreseeable future?

Desper: Clearly, yields are influenced by several factors, including lease rates and the cost of money, but absent dramatic changes, we expect that prime logistic yields will continue to be very competitive for investors in this market in the near term. We have strong tenant/occupier demand, low vacancy rates and a diminishing supply of product. Consequently, we don't expect dramatic changes in 2017.

GlobeSt.com: What factors could make the pendulum swing in the opposite direction?

Desper: Dramatic change in the cost of money, and while we don't see it right now, substantive changes to the global economy impacting the US markets. If tenant demand declines, resulting in supply increases, then we might see some pause, but not otherwise.

GlobeSt.com: How do investors look at markets with low prime logistics yield?

Desper: Investors expect core markets like Southern California to have very aggressive prime logistic yields, while at the same time those investors view assets in core markets as a critical component to diversifying their portfolios. Core markets like Southern California offer a more stable income and therefore more predicable returns than other markets. Investors recognize those strengths and are willing to pay up to mitigate such risks.

NEWPORT BEACH, CA—Orange County will continue to be very competitive, with buyers paying up for class-A distribution space and creating demand that will continue to push lease rates up for occupiers, CBRE EVP Dave Desper tells GlobeSt.com. According to a recent report from the firm, the rapid rise of e-commerce has pushed investment yields on prime logistics properties across the globe close to record lows, and the 10 individual markets with the lowest prime yields in the world include the Inland Empire and Los Angeles/Orange County at 4.25%.

Desper focuses on industrial/R&D corporate headquarter facilities in Orange County. We spoke with Desper about what the prime logistics yield means for Orange County and what could make the pendulum swing in the opposite direction.

GlobeSt.com: What does the low prime logistics yield mean for the Orange County market?

Desper: Orange County will continue to be very competitive, with buyers paying up for class-A distribution space. This kind of demand will continue to push lease rates up for occupiers.

GlobeSt.com: Do you see this yield changing in the foreseeable future?

Desper: Clearly, yields are influenced by several factors, including lease rates and the cost of money, but absent dramatic changes, we expect that prime logistic yields will continue to be very competitive for investors in this market in the near term. We have strong tenant/occupier demand, low vacancy rates and a diminishing supply of product. Consequently, we don't expect dramatic changes in 2017.

GlobeSt.com: What factors could make the pendulum swing in the opposite direction?

Desper: Dramatic change in the cost of money, and while we don't see it right now, substantive changes to the global economy impacting the US markets. If tenant demand declines, resulting in supply increases, then we might see some pause, but not otherwise.

GlobeSt.com: How do investors look at markets with low prime logistics yield?

Desper: Investors expect core markets like Southern California to have very aggressive prime logistic yields, while at the same time those investors view assets in core markets as a critical component to diversifying their portfolios. Core markets like Southern California offer a more stable income and therefore more predicable returns than other markets. Investors recognize those strengths and are willing to pay up to mitigate such risks.