"The run up in interest rates and how rapidly they rose really flipped the script. As developers, you build to a certain yield thinking that you'll be able to finance on the back end of that, but that back end financing eventually evaporated."
"Both Thakkar and Hans described Southern California industrial real estate as being on sale, with assets trading below replacement cost and at values not seen in years."
"In Greater Los Angeles, fourth quarter sales volume reached $1.2 billion, an increase of 8.6 percent quarter-over-quarter and 6 percent year-over-year, according to CBRE."
"Dedeaux has felt this shift, noting that for the last two years, the firm was making more calls to capital partners than they were receiving, but that this has recently reversed."
Industrial real estate is witnessing a new opportunity cycle following a tumultuous period marked by pandemic-driven demand and subsequent oversupply. Recent data indicates a resurgence in demand for sophisticated industrial products, particularly influenced by AI and data centers. The rise in interest rates and tariff uncertainties contributed to previous declines. Southern California's industrial assets are now trading below replacement costs, prompting renewed interest from capital markets. Sales volume in Greater Los Angeles increased significantly, indicating a shift in market dynamics and investor confidence.
Read at therealdeal.com
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