The L.A. industrial market is booming—and it also may be recession proof. According to new research from Ten-X, the market passes the cyclical stress test for 2019/2020, with a prediction that vacancy rates will drop in 2021. In the nearer term, net absorption is expected to outpace out pace completions by one million square feet through 2018, bringing the vacancy rate in the greater L.A. area to 3%. To find out more about the strength of the market and why it is able to withstand a potential recession, we sat down with Matthew Schreck, quantitative strategist at Ten-X, for an interview.

GlobeSt.com: Why does L.A. industrial have lower than average downside risk?

Matthew Schreck: On the supply side, LA faces fewer supply additions than many markets, reducing the potential downside for fundamentals. Demand wise, trade flows have been picking back up throughout 2017, which is benefitting LA via the market’s port exposure and strong distribution network. Combined with the growth of e-retail and storage needs, we think this provides a solid basis for demand that would keep LA industrial fundamentals healthy even in the event of an economic downturn scenario.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.