Overview
Interest rates are still the story in Southern California industrial real estate. Borrowing costs remain well above where they were a few years ago, and that continues to weigh on property values and shape how buyers and tenants approach their decisions. Quality buildings in strong locations are holding up better, while functionally challenged or secondary-location product is feeling more of the pressure.

Owner-Users in Smaller Buildings
Smaller buildings are a different story. A lot of owner-users are moving with real urgency, worried that rates could climb further or stay elevated. For many, waiting isn't risk-free. Locking in financing now, whether SBA or conventional, can look better than gambling on relief that may not come, and ownership still offers long-term stability and a chance to build equity. The result is that well-priced small-bay buildings continue to draw serious interest, and often more competition than you'd expect in this environment.

What Tenants Are Telling Us
Most business owners want to focus on running their companies, not on complicated real estate decisions, especially with the economy throwing curveballs. Here's what that looks like on the ground:

Decisions are taking longer, with more caution along the way.
Renewals and short extensions are winning out over relocations.
Tenants want flexibility on term, size, and expansion rights rather than big long-term commitments.
Move-in-ready, turnkey space is getting a lot more attention than buildings that need heavy improvements.

Takeaways

Landlords: Price it right and make it easy to occupy. Clean, well-priced space is moving, and overpriced space is sitting.
Tenants: Start planning early. Even if your lease isn't up for a while, it pays to know your renewal options and timeline well in advance.
Owner-users: If buying has crossed your mind, it's worth running the numbers against your lease now rather than waiting on rates.

Looking Ahead
Expect an uneven market in the near term, with a lot depending on building size, location, and who the user is. If you're thinking about a lease, a purchase, or a sale, I'm always happy to talk through your situation and run the numbers.

John Viscounty
Senior Vice President, Partner
Voit Real Estate Services
3280 E Guasti Rd. Suite 100 | Ontario, CA 91761
D (909) 545-8002
jviscounty@voitco.com | www.voitco.com
Cal BRE, License #02028915