I was able to tour the Port of Long Beach industrial area yesterday with Blake Tippet from Grubb and Ellis. Blake, thank you for the time and of course lunch at an epic Mexican place (Lucio’s). After recent reports of port traffic being up over 20% from last year in exports and imports, I felt it was a great time to visit the port area and see first hand how the market was responding. In summary, the market is definitely soft with a large amount of vacant buildings and quite a few buildings coming to market in the near future. The few major players in the area have remained active however there is a shortage of new buyers that see a demand for port located assets. In my opinion, the port market will be a great place to acquire assets in 2011-2013.
We feel there is ample opportunity in the port area as sellers are beginning to drop prices as available inventory has seen limited activity over the past 6-9 months if any. There is a large amount of well located space available close to the port with large truck parking, decent dock loading and soft rents in the low NNN .40’s. The port inventory should see a recovery as new lower rents offset fuel costs to reach the IE.
As port traffic continues to increase, space near the port will become more desirable. Companies that moved to the Inland Empire a few years ago when space was limited and prices were at record highs are starting to migrate back to the port shores. We think this is a positive sign for the overall industrial market and the port area should start to see a positive absorption at years end.
We would like to hear your thoughts and opinions. Please send us an email in regards to our viewpoint; we will post them to our blog.