Industrial Market Overview Report: Part Four

SKIP AHEAD TO

• Amazon Secures Two of the Top Five Most Valuable Leases in Los Angeles–Orange County–Inland Empire Market
• Across Major Markets, 2026 Is Peak Year for Industrial Lease Expirations by Total Square Footage
• Tenant Spotlight: Amazon Inks New Slew of Deals, With Highest Quarterly Volume Since Early 2022 and New High for Average Rents
• Industrial Subtype Spotlight: Refrigerated/Cold Storage

CompStak conducted an in-depth analysis of market statistics across eight major U.S. markets, with a special emphasis on the Los Angeles-Orange County-Inland Empire region. Leveraging CompStak’s comprehensive data, we’ve identified a trend of moderation in the industrial leasing sector. Our upcoming blog series will delve into these insights, providing a detailed exploration of the industrial real estate landscape.

Interested in exploring the full report? Find it here.

Amazon Secures Two of the Top Five Most Valuable Leases in Los Angeles–Orange County–Inland Empire Market

The Los Angeles–Orange County–Inland Empire industrial market captured three of the top five most valuable lease transactions (by total consideration) across major markets from Q2 2023 to Q1 2024. In addition, two of the top five most valuable deals overall were signed by e-commerce giant Amazon in the first quarter of 2024. This suggests a recent uptick in space appetite from Amazon. On the East Coast, Amazon leased 1 million square feet in the Philadelphia-Central Pennsylvania market in Q3 2023, which ranked as the fourth most valuable deal from Q2 2023 to Q1 2024 in that market.

Most Valuable Industrial Deals in Select Gateway Markets

Los Angeles, New Jersey, Philadelphia, Atlanta, Chicago, and Dallas-Fort Worth

Across Major Markets, 2026 Is Peak Year for Industrial Lease Expirations by Total Square Footage

According to CompStak’s data, 2026 is a peak individual year for lease expirations, with about 15% of total current leased space set to expire that year, followed by another 13.1% of space in the following year. For the total leased space expiring in 2026, about one-third of those leases were executed in 2021, when rent growth was accelerating. While renewals being executed recently are still often facing double- to triple-digit percentage increases in starting rents from their previous rent to new negotiated rent, these increases may moderate over future years.

Tenant Spotlight: Amazon Inks New Slew of Deals, With Highest Quarterly Volume Since Early 2022 and New High for Average Rents

According to CompStak’s nationwide leasing data, Amazon has returned to the market stage in a big way, with quarterly volume surpassing levels seen since early 2022 and reaching a new high for both average transaction size and average base and effective rents for deals completed in Q1 2024, when the average transaction size exceeded 819,000 square feet. This was driven by seven deals totaling over 1 million square feet, primarily concentrated in Arizona, followed by the Los Angeles–Orange County–Inland Empire market. Although the rents for these completed transactions exceeded previous highs for Amazon deals, they fell short of the overall market average across major markets, except for the Los Angeles–Orange County–Inland Empire. Here, a deal at 4000 Hamner Avenue surpassed the market averages.

Industrial Subtype Spotlight: Refrigerated/Cold Storage

Refrigerated and cold storage continue to be prime subtypes for industrial investment. According to CompStak data from Q2 2023 to Q1 2024, the Los Angeles-Orange County-Inland Empire market, followed by Northern and Central New Jersey, recorded the highest average starting rents for cold storage leases in major markets. Among the largest transactions closed during this time period, Performance Food Group and United Natural Foods (UNFI) ranked highly for cold storage deals closed in major markets.

Want complete insights? Download the full report here.