AEW Capital Management Awards 2.6 MSF Leasing Contract to Cushman
By Nicholas Ziegler, News Editor
Noting that both investors and developers are struggling to find opportunities in the Southern California industrial markets, Dave Hess, a senior director with Cushman & Wakefield Inc. was optimistic about his firm’s recent signing of a 2.6 million-square-foot management contract for 11 industrial properties owned by AEW Capital Management. The properties, which are owned by several of AEW’s comingled investment funds, are located in multiple Southern California submarkets including the Los Angeles International Airport submarket, Fullerton, Santa Fe Springs, Eastvale in the Inland Empire region, Chatsworth in the Los Angeles North submarket, Chino and Paramount.
These are high-end, class A buildings, said Dee Eckman, director and account manager of Cushman’s corporate occupier and investor services group, said. They are primarily single-tenant buildings, although some have two to four tenants. All the assets are stabilized with only two vacancies in the entire portfolio.
Cushman will work to continue the buildings’ management strategy during a time when industrial fundamentals in the area are trending up. Fundamentals in the Southern California industrial market continue to strengthen, Hess said. With vacancies falling and rents improving, users are having difficulty finding space in some size ranges.
According to Cushman’s own research, the Southern California market is often a bellwether for the rest of the nation’s industrial outlook. As the world’s largest industrial hub, this market historically is the first to enter a down cycle yet also traditionally leads the way out, Jim Dieter, Cushman’s executive vice president of industrial brokerage, wrote in a recent report. True to form, the Greater Los Angeles market topped the nation in leasing activity, with 36.7 million square feet in transactions. Its vacancy rate of 4.9 percent is the lowest in the country.
The greater U.S. industrial market saw a solid recovery in 2011, with leasing activity exceeding 417 million square feet — a 20.5 percent improvement over 2010′s 345.8 million square feet and the highest level of activity since 2007. As a result, vacancy rates have stabilized and the current national rate sits at 10 percent, a decline of 80 basis points from year-end 2010.