Attracted to L.A.'s robust historical rent growth and high barriers to entry, institutional investors and REITs have driven 40% of acquisition volume in the market over the past three years, up from 30% in the past decade. User acquisitions have fallen to 11% of sale volume in the past three years from 16% in the past decade, while private investors and private equity funds have also lost some market share, driving just under 50% of buyer volume

Sales activity is beginning to rebound, with 34 transactions closing in the first half of 2024, compared to only 33 closed in all of 2023. Most sales involve assets trading for a price above their purchase price due to long-term appreciation. However, valuations have faced downward pressure over the past year as cap rates have increased. In the first quarter of 2024, Rexford acquired a 3 million SF portfolio in LA and Orange County from Blackstone for just under $1 billion, or $318/SF, including several assets in Santa Fe Springs/La Mirada. An owner-user, McMaster-Carr Supply acquired the Colonnade Business Park, a 240,000 SF 7-building portfolio of industrial and flex buildings for $75 million, or $313/SF, in July 2024.

Institutional investors and REITs remain active in Commerce, accounting for over 50% of acquisition volume over the past three years, up slightly from historical averages. Private investors remain active, and users account for nearly 10% of acquisition volume over the past three years, which is slightly below historical averages. Sales volume registered around $25 million in the first half of 2024, after jumping to $61 million in the fourth quarter of 2023, accounting for the majority of the $102 million traded in 2023 based on 21 deals. The majority of fourth quarter sales volume stems from Prologis acquisition of 7400 E Slauson Avenue, a 1951-built, 240,000-SF warehouse on 13 acres from The Gehr Group for $50 million, or $209/SF, in December 2023. The seller agreed to a nine-month lease back. Like other large sales across the market, the asset provides investors with a future redevelopment option, as the building is fully entitled for a roughly 50,000 SF expansion. Most properties traded in the past 12 mont