Middle Market Digest: This Week in Southwest

Notably, the number of transactions in the Arizona markets slowed this week, with few closings to report. In the last few weeks, Arizona markets, particularly Phoenix, has seen tremendous acquisition activity and development starts and deliveries. While activity slowed, the deals were still notable. One deal in particular of an Amazon industrial facility, broke the record for the highest pricing in this cycle. Activity, however, remained strong in the Los Angeles market, with a focus on industrial deals and leases. Here’s a look at this week’s trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

LOS ANGELES—Seaports have become a vital economic engine. California, which is the second-largest goods exporting state in the country behind Texas, has eight of the nation’s 25 most valuable international trade corridors. This year, California’s three container ports will spend hundreds of millions of dollars on capital projects and will further refine their cargo-handling processes, to ensure they maintain market share. Long Beach is engaged in a 10-year, $4 billion capital improvement program, Los Angeles is spending about $2.5 billion over 10 years, and Oakland will spend $111 million over five years on capital projects. The Long Beach and Los Angeles ports together have had a tremendous impact on the surrounding industrial market. Overall vacancy rate in the Los Angeles Basin remained at 2.1% at mid-year, down 40 basis points from a year ago. Demand continues to outpace supply of new properties with 10.9 million square feet of occupancy gains during the first six months of the year. In terms of leasing activity, the Inland Empire and Greater Los Angeles are number one and number two in the nation, respectively and brought the L.A. Basin total to 45 million square feet at mid-year. Healthy demand from logistics and distribution users continues to fuel strong warehouse rent growth with the property sector’s average rent increasing by 17.5% from a year ago. Overall vacancy rate for the South Bay market, which is closest to the ports, dropped to below