As sales by internet retailers grow and drive demand, U.S. warehouses are becoming more costly and harder to come by. Nationwide, the industrial vacancy rate is 5.3 percent, a 17-year low, according to JOC.com's data hub. E-commerce fulfillment is a big reason why the demand for warehouses and distribution centers has increased of late, Jones Lang LaSalle says, representing about 40 percent of the leasing of industrial properties today.
Office development and leasing activity remain robust in the Los Angeles area, thanks to a growing presence of tech, engineering and financial firms driving demand for space. The U.S. capital of the entertainment industry is also one of the largest markets in the country, with almost 254 million square feet of office inventory, according to Yardi Matrix’s second quarter report on the Los Angeles office market. The thriving city continues to draw in new tenants as job growth climbs. In the 12 months ending in March resulted in the addition of 70,800 jobs to the metro, while employment growth trailed slightly behind the national growth rate (1.6 percent) at 1.4 percent year-over-year.
The proposed $13.7 billion acquisition of organic grocery retailer Whole Foods Market by e-commerce giant Amazon holds the potential to cause some major disruption in the grocery industry, but experts say retail real estate investors should remain optimistic. Experts predict Amazon will use the Whole Foods stores, in part, as hubs for grocery pick-up and delivery, helping Amazon resolve the “last mile” dilemma of how to get products from local shipping hubs to nearby customers. Amazon is also likely to improve efficiency at Whole Foods’ distribution centers by incorporating their technology. Experts say the Amazon-Whole Foods deal presents an opportunity for retail real estate investors, but grocers will need to adapt to the new environment and accelerate their growth strategies in order to remain competitive.
Illinois senators Tuesday approved bills that impose a two-year property tax freeze for school districts and local governments outside of Chicago. One would freeze property tax levies for school districts, but they'd be able to seek a waiver from the Illinois State Board of Education. The other would freeze taxes for other government bodies with exemptions to allow them to pay down debt and make contributions to employees' pensions. Gov. Bruce Rauner’s office, which has sought a four-year property tax freeze, labeled the bills “phony.”