Demand For Cannabis Property Eases in the Los Angeles Industrial Market
Brokers Notice Price Differences From Start of Year
Brokers say the cannabis market's effect on industrial real estate is easing this year in Los Angeles as the industry takes shape following a frenzy of activity spurred by its legalization.
When Los Angeles began accepting applications for the sale of cannabis for recreational purposes at the beginning of 2018, the industrial market in the nation's second-largest city surged as hopeful businesses with cash on hand started leasing up and buying space at a rapid pace, brokers said.
Max Kaizer, vice president of acquisitions at West Los Angeles-based industrial real estate firm Rexford Industrial Realty Inc., said the cannabis industry was "really driving crazy prices in the Eastern San Fernando Valley primarily” about 40 minutes west of downtown Los Angeles. “Dumpy 20,000, 30,000-square-foot buildings were asking over $2 a foot to lease and well over $250, maybe even $300 for a sale,” instead of non-cannabis deal pricing of $1 a foot for leasing and $200 to $250 for selling, he said.
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