- April 1, 2015: Vol. 27, Number 4

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On the West Coast waterfront: Big ships and diesel in the salt air mean rising property values, but keep an eye on the Panama Canal

by Benjamin Cole

When many investors think of “institutional property,” visions arise of trophy office towers, high-end shopping complexes or internationally recognized destination resorts. But in today’s market, add to that list plebeian waterfront properties in a growing number of port cities, including Los Angeles. Indeed, buyers might pay nearly as much for a warehouse as a downtown office building on a per-square-foot basis, a situation unheard of only a few years back.

In December 2014, for example, Rexford Industrial Properties, a public REIT specializing in Southern California industrial-warehouse properties, bought a 63,654-square-foot, logistics-oriented warehouse complex near the ports and Los Angeles Airport for $173 per square foot.

To put that per-square-foot figure in context, recall in 2013 the tallest, most iconic and best-known office skyscraper in Los Angeles’ downtown — the U.S. Bank Tower — sold for $262 a square foot, admittedly higher than Rexford Ind

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