Los Angeles, Calif. December 8, 2021 – Industrial property experts are seeing a common thread across Los Angeles’ markets, most recently in the San Fernando Valley, where lease renewals are top-of-mind amongst tenants. Several recent transactions from Colliers’ Los Angeles-based brokerage team, comprised of executive vice presidents Greg Geraci, David Harding, Matt Dierckman, and Billy Walk, speak to the rising trend.
Over the last few weeks, the team negotiated two multiple-building lease renewals of large-scale properties. In Sun Valley’s Shadow Mountain Industrial Park lease renewal, Colliers negotiated a deal on behalf of the landlord, CIM Group. At the same time, Cox Real Estate Services, Inc.’s Greg Cox represented the tenant, Schecter Guitar Research, Inc. Made up of three separate units in the park (10937, 10939, and 10953) on Pendleton Street, the total renewal equaled 47,634 square feet. The second lease renewal, wherein the Colliers team and Greg Cox teamed up to represent the landlord, ParRam LLC, is situated in Chatsworth and includes 20320 and 20350 Prairie Street and 9315 Oso Avenue, a combined total of 155,529 square feet.
“The historically low availability of San Fernando Valley industrial buildings has led to notably higher lease rates and lack of available properties,” said Greg Geraci. “It’s as tight of a market as we’ve seen in thirty years. As a result, the lack of relocation alternatives has compelled many tenants to renew their existing leases.”
During the last two quarters, the San Fernando Valley has seen a dramatic decrease in the vacancy rate, from 1.5 to 0.6 percent, and availability, from 2.1 to 1.4 percent. Due to the lack of inventory and strong demand, lease rates have increased 6.1 percent quarter-over-quarter overall and significantly higher in areas with the highest demand, such as Burbank and Van Nuys, and the market strongly favors landlords.
“Both transactions in Sun Valley and Chatsworth are indicative of strong tenant preference for lease renewals, and our team certainly anticipates more of the same to appear across the market,” commented Geraci.