The COVID-19 pandemic has slowed activity and created uncertainty among landlords and tenants. However, a predicted outcome of the pandemic is the acceleration of e-commerce demand and the need for emergency inventory, both would contribute to a potential increase in demand for industrial space.
The Greater Los Angeles (GLA) region attracted roughly $375 million of capital in Q2 2020. Volume was down 28.3% from the five-year quarterly average of $1.3 billion, sinking 77.4% year over year.The average sale price per sq. ft. fell 8.6% year over year to $194, and the 12-month average cap rate fell 10 bps year over year to 4.8%.
The average asking lease rate in GLA declined 3.9% quarter over quarter from the rate of $0.94 in Q1 2020 to $0.90 per sq. ft. per month in Q2 2020. This was the first quarter-over-quarter reduction in asking lease rates since Q1 2014, when it fell 0.9%. The average asking lease rate still had positive growth of 1.0% year over year.