[Report] Industrial Reset: Analyzing the Shift Toward Tenant-Favorable Leases

Industrial space is still in demand, but at what price?

Marked by the transition towards more tenant-friendly deal terms, the Los Angeles – Orange County – Inland Empire is at the forefront of this changing market dynamic. CompStak has partnered with Savills to present an analysis of the industrial reset as a shift toward more tenant-favorable leases takes shape. This joint report explores notable market shifts following the cooling of the previously white-hot industrial sector.

Download the report to explore:

• Vacancy Rising: Industrial hubs have witnessed an uptick in vacancies over the past year, driven by an increase in new supply and a moderation in demand.
• Rent Slide Begins: Two major markets experienced steady declines in effective rents during the past year, while others analyzed continued to record increases.
• LA Leads Lease Flexibility: Landlords in Greater Los Angeles have become more flexible on starting rent and free months yet remain steadfast on high annual escalations.
• Pricing Pressure Builds: The rapid growth of the past four years, combined with recent sharp rises in vacancy, is exerting downward pressure on effective rents in select markets.
• Temporary Dip: Effective rents remain 17% to 126% higher than 2019 levels, and with a 69% decline in construction starts nationwide, the current softening is anticipated to be moderate and brief.

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