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Much has been written about businesses vacating California. One “catcher’s mitt” state has even coined a phrase – “Texodus” – to describe companies bolting California for the Lone Star state of Texas. Catchy indeed. Another city has erected a mock Statue of Liberty on its strip – “give me your tired, your poor, your huddled masses yearning to breathe free, the wretched refuse of your teeming shore…”. Who knew that would be applicable to enterprise seeking asylum from California in a business friendly environment. Finally, governors are racking up frequent flyer miles traveling here to recruit our manufacturing base. The promise of economic incentives, cheaper houses, and smaller tax burdens lure our local operations to consider an out-of-state move. But is the grass really greener?
Certainly, the decision to move – in addition to the carrots afore mentioned – is a complex matrix of workforce availability, quality of life, affordable utilities, access to raw materials, logistics considerations, and to a small extent – the cost and availability of commercial real estate to house the organizations. That small slice – vacant locations – is the subject of this column.
So, I got my Jon Lansner on and examined several metropolitan service areas around the United States. Compared were available Class-A 100,000 square foot (used was a range of 75,000-125,000 square feet) industrial buildings built after 2000. Considered were the existing square footage – both vacant and occupied, number of spaces available, average asking lease and sale prices. Also, a benchmark for SoCal was included. All that was missing was his trusty spreadsheet.
Los Angeles County, California. 6,431,024 square feet existing and under construction – 35 buildings available – Average asking lease rates $1.03 psf – Average asking sale price $357 psf.
Orange County, California. 1,707, 949 square feet existing and under construction – 3 buildings available – Average asking lease rates $.93 psf – Average asking sale price $$296 psf.
Inland Empire East and West, California. 7,099,294 square feet existing and under construction – 10 buildings available – Average asking lease rates $.66 psf – Average asking sale price $170 psf.
Las Vegas, Nevada. 1,888,928 square feet existing and under construction – 6 buildings available – Average asking lease rates $.74 psf – Average asking sale price $260 psf.
Salt Lake City, Utah. 2,576,011 square feet existing and under construction – 10 buildings available – Average asking lease rates $.57 psf – Average asking sale price $150 psf.
Denver, Colorado. 4,139,989 square feet existing and under construction – 31 buildings available – Average asking lease rates $.73 psf – Average asking sale price $162 psf.
Chicago, Illinois. 9,810,710 square feet existing and under construction – 28 buildings available – Average asking lease rates $.52 psf – Average asking sale price $99 psf.
Columbus, Ohio. 792,518 square feet existing and under construction – 4 buildings available – Average asking lease rates $.54 psf – Average asking sale price $105 psf.
Nashville, Tennessee. 1,555,186 square feet existing and under construction – 7 buildings available – Average asking lease rates $.62 psf – Average asking sale price $94 psf.
Dallas Fort Worth, Texas. 11,749,896 square feet existing and under construction – 53 buildings available – Average asking lease rates $.48 psf – Average asking sale price $90 psf.
Houston, Texas. 9,695,070 square feet existing and under construction – 41 buildings available – Average asking lease rates $.58 psf – Average asking sale price $84 psf
Atlanta, Georgia. 5,464,511 square feet existing and under construction – 15 buildings available – Average asking lease rates $.50 psf – Average asking sale price $90 psf.
Jacksonville, Florida. 452,611 square feet existing and under construction – 1 building available – Average asking lease rates $.30 psf – Average asking sale price $73 psf.
Allen C. Buchanan, SIOR, is a principal with Lee & Associates Commercial Real Estate Services in Orange. He can be reached at [email protected] or 714.564.7104. His website is allencbuchanan.blogspot.com.
