JULY 11, 2016

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Study: opportunity for lease growth in SoCal industrial

by Reg Clodfelter

Industrial leases in Southern California are poised to grow in value at a higher rate than that of industrial leases nationwide, according to the latest Property Income Risk & Performance study from MSCI focused on the LA/OC/Riverside area.

 “There is a potential rental gain of 8 percent in the industrial sector in Southern California,” explains Simon Fairchild, executive director of MSCI. This compares with a potential gain (defined as the difference between market rents and contracted rents) of 5 percent for industrial leases nationwide.

“Investors might want to protect those potential above-average gains when their industrial leases renew,” Fairchild adds.

This opportunity for above average rental growth may not be as niche as it sounds, either. Logistics is the sector in Southern California in which institutional property investments are most concentrated, and the region itself had accumulated more direct

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