Paul Sablock is a managing director at JLL.

Los Angeles industrial leasing slowed down. According to research from JLL, total leasing volume was down in the first quarter with vacancy staying at 2.2%, even as leasing velocity and demand remained strong and rental rents increased—up to $10.08 per square foot. Experts can't pinpoint the cause of the shift, but it could be caused be low lease renewals or low available supply of new product.

“We are feeling an overall slowdown in the infill markets though we are not exactly sure what this is caused by,” Paul Sablock, managing director at JLL, tells GlobeSt.com. “It could be that many tenants have renewed and this information does not make it into the system. New deals are easy to track but renewals are not. Also due to the lack of product, overall new leasing is down. No options, no deals. However, there is approximately 1 million square feet of new product hitting the Central Marketplace in the next six to nine months.”

New construction activity could help the latter later this year. There is currently 6 million square feet in the construction pipeline, however, nearly 1 million square feet has already been preleased. While new deliveries could fuel leasing volumes, Sablock says that the rent premiums for this product won't guarantee it. “New development lease rates are so high that it will be interesting to see if there is enough corporate demand as the typical mom-and-pop entrepreneurial world is not capable of paying these rates,” he says. “There are always exceptions, such as high flying garment firms. It will be interesting to see how this plays out over the next six months.”