13500 S. Figueroa Street
For Rent
- Dead Warehouse Space
- 10,000 Square Feet
- $9,000 per month Gross
- Available Immediately
- Flexible Term
- 24′ Clear/Sprinklered/Shared Bathrooms
- Close to Loading Doors
Introducing Mr. Warehouse
THE NEW ALIGNMENT: INDUSTRIAL REAL ESTATE IN 2026
A Three-Part Series introducing Mr. Warehouse.
PART 1: Global Logic, Local Intelligence, and the AI Edge
In my early days in the industrial real estate business, information was physical. Listings were delivered in three-hole-punched books, an inch thick, and we were “farm brokers” tethered to small, tightly drawn sub-markets in Los Angeles. If you stepped out of your boundary, you had to bring in a partner who worked that different turf. It was an era of high friction, but it birthed the deep local specialization and clients that stayed with me for decades.
Today, we are in a New Alignment. Two massive shifts are happening simultaneously: a geopolitical fracturing where U.S. bloc industries are “friend-shoring” away from traditional offshore centers, and a technological revolution where AI is partnering with humans to lead us to new directions. A major underpinning of the business, the agency relationship, will diminish as a transaction mindset takes hold. We are facing a reconfiguration of the industrial real estate business.
AI: The Lens for a Fractured World
The New Alignment allows us to have a global view that was previously impossible for a local broker. By mapping industrial infrastructure and supply chains within and across borders, we can see the “fracture” in real-time. Through our domestic and international network of SIOR brokers, we aren’t only looking at filling vacancies; we are examining how a specific property fits into a resilient global network. AI allows us to move beyond the “farm” mentality and into a high-level global network.
The Paradox: Better Global Tools, Better Local Intelligence
A side effect of this shift is that global tools and perspectives make us more aware of the local level. Even as we monitor global trade and production, these same techniques provide a sharper, more granular understanding of our home market. At Mr. Warehouse, we update our location mapping and pricing graphs for the Greater Los Angeles area monthly and offer these analytics to our partners in other markets. It’s a vast improvement from the days of weekly listing books.
AI opens new industrial real markets to explore. And by using what we learned locally, we can partner with our global colleagues to achieve what we couldn’t do alone.
PART 2: Industrial Infrastructure for the New Alignment
In the “farm broker” days, our data was fixed in a physical book. Today, our data lives with tools that capture intelligence. In the New Alignment, we don’t look only for real estate – although through that is the primary means we are compensated; we look for meaning in infrastructure, supply chain, humanity and how that fits into a model of production and distribution. We measure a central principle in the real estate business – location, location, location – and its impact on finance, operations, and the intangible.
Mr. Warehouse adopts three layers of data. These tools allow us to map out the market with precision, helping occupiers and investors find the “nodes” that will thrive in a fractured economy.
Layer 1: The Infrastructure Map (Drupal & Parcel Data)
We use the Drupal Geofield module as a simple way to store and map industrial infrastructure location data. The map visualizes location and geographical relationships. By feeding high-resolution parcel-level, ownership and location into the map, we create a transaction platform not only around availabilities, but proximities.
Layer 2: The Logic of Localization (Streamlit & Analytics)
Once we create the physical map, we apply a layer of logic using Streamlit, an analysis software that uses a property database to calculate physical and value relationships for the purpose of making transactions. We turn raw data into meaning. For instance, our Los Angeles industrial data will show the closest and most optimum properties to move. For an occupier, this layer shows if a given site will optimize their supply chain or if they need to replicate their business, or a part of it, in a more efficient manner or hub.
Layer 3: The Organic Network (The Social Layer)
The most powerful data structure we have isn’t digital—it’s human. After 45 years in the business, with most of those years as an SIOR and attending over 65 conferences, our network of relationships is a living social map domestically and internationally. We use modern social networks and our Global SIOR partners to enhance our technology. It’s a privilege for me to work with the best in the business. This layer turns “data points” into “handshakes.”
PART 3: Proven Strategies, Intelligent Tools
In the industrial real estate business, the fundamentals haven’t changed in nearly half a century. Location is primary. Occupiers will always want to improve their business. Investors want a reasonable financial reward for taking on real estate risk. What is changing is how humans use machines and how artificial intelligence can serve, not as a tool, but a guide.
The Shift Toward Transactional Excellence
As we embrace the New Alignment, the nature of the relationship between broker and client is evolving. While State Real Estate Licensing Law emphasizes traditional agency relationships in their education and discipline, the reality for sophisticated corporations and institutional buyers is they want a transactional relationship. Clients want high-level intelligence, execution and data-informed results over traditional handholding. We always operate within agency law and focus on transactional success with the speed and precision.
The Human Partner in a Digital World
We are utilizing a sophisticated web-and-data stack to achieve these results:
- AI for Industrial Infrastructure and Supply Chain: We use AI to see the global “fracture” as it happens, predicting where the next major industrial nodes will grow.
- Parcel Mapping for Relationships: We use deep parcel data to build and maintain personal connections with owners and stakeholders.
- Global SIOR Collaboration: We collaborate on a personal and regular basis with SIOR colleagues located across the U.S. and the globe.
Conclusion: Understanding the New Alignment.
We use technology to understand location and network relationships under the New Alignment. While global in scope, the local becomes more informed. AI and Fragmentation will lead many of our client to succeed and we want to support them using new technologies and fundamental real estate principles. The New Alignment is a period of opportunity.
Novelis – Oswego, New York
This plant shutdown caught my attention. The Novelis Plant in Oswego, New York supplies 40% of the aluminum for the U.S. auto industry.
South Bay (L.A.) Industrial Buildings
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South Bay (L.A.) Industrial Building |
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Industrial rents have stayed relatively flat except for a spike during the Covid years. Currently, another adjustment is underway due to a reduction of Chinese goods coming through the L.A./L.B. Ports. The Los Angeles region is a gargantuan warehouse market linked closely and dependent on international trade. |
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Space availability is increasing because of weak demand. International trade is reduced. One segment that is under-supplied is Hard Tech.Buildings require power, offices, security clearances, parking, cleanliness, and a location along the 405 Corridor. Timing is right to re-position buildings in this corridor. |
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Industrial Clusters |
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Cluster strategy is used by occupiers to be near skilled employees, vendors, and synergies. El Segundo, the 405 corridor and neighboring cities |
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Hard Tech Manufacturing Demand in South Bay Los Angeles
# Updated Analysis: Hard Tech Manufacturing Demand in South Bay Los Angeles
## Executive Summary
Based on new market insights and research, this analysis updates our previous report on Los Angeles industrial real estate opportunities in the tariff era. A significant mismatch exists between current industrial real estate supply (optimized for warehouse/distribution) and actual market demand (increasingly from aerospace, defense, and space manufacturing). This creates both challenges and unique investment opportunities, particularly in the South Bay market where hard tech manufacturing is experiencing substantial growth.
## Key Findings
1. **Supply-Demand Mismatch**: Recent industrial developments were primarily designed for warehouse and distribution with numerous dock doors and container yards, but current demand is predominantly from manufacturing sectors.
2. **Hard Tech Growth in South Bay**: The South Bay region has emerged as “ground zero” for hard tech manufacturing, driven by aerospace, defense, and space technology companies.
3. **SpaceX Effect**: SpaceX’s presence has created a powerful talent ecosystem and entrepreneurial engine, with its alumni network founding over 96 companies that have collectively raised more than $19 billion.
4. **Increasing Manufacturing Footprints**: Despite overall market vacancy increases, hard tech companies are actively expanding their manufacturing space in South Bay, as evidenced by Trio Manufacturing tripling its footprint and Aerospacelab establishing a new 35,000 sq ft manufacturing facility.
5. **Specialized Talent Concentration**: South Bay hosts a unique concentration of specialized engineering talent that is difficult to find elsewhere, creating a self-reinforcing ecosystem for hard tech growth.
## South Bay Hard Tech Demand Assessment
The South Bay region of Los Angeles has transformed from what was once dismissively called “the sticks” into the epicenter of hard tech innovation in Southern California. This transformation is particularly notable given the broader context of increasing industrial vacancy rates across the region.
### Current State of Hard Tech in South Bay
1. **Concentration of Companies**: Of the LA Hard Tech 50 companies covering all of Southern California, thirty are located in South Bay, including fourteen in the five and a half square mile city limits of El Segundo.
2. **Talent Ecosystem**: South Bay is attracting a unique culture of young Gen Z and Millennial founders in hard tech who are leveraging decades of experience from more seasoned engineers working in established engineering firms.
3. **Manufacturing Focus**: These companies are focused on rapid iteration, agile hardware design, and prototyping using new tools from the local hard tech ecosystem, including additive manufacturing of metal and specialized software tools.
4. **Growth Trajectory**: Demand for manufacturing space in the South Bay continues to rise as new startups in aerospace, defense, and hard tech emerge and capitalize on the rich labor pool in the market.
### Specific Examples of Hard Tech Expansion
1. **Aerospacelab**: Recently opened a 35,000-square-foot satellite manufacturing facility and U.S. headquarters in Torrance, with plans to double their local workforce by the end of the year.
2. **Trio Manufacturing**: An aircraft engineering and manufacturing firm specializing in both commercial and military endeavors has tripled its footprint, relocating from a 40,076-square-foot facility in El Segundo to a 123,189-square-foot building near Gardena and Carson.
3. **SpaceX Alumni Network**: The SpaceX talent ecosystem has grown from twenty engineers in 2004 to over 10,000 employees today, representing over 1% of South Bay’s population of 750,000 people.
## Structural Challenges in the Market
The mismatch between supply and demand presents several structural challenges that create both problems and opportunities:
1. **Building Configuration Mismatch**: Warehouse buildings optimized for distribution often lack:
– Sufficient power infrastructure for manufacturing equipment
– Appropriate floor load capacity for heavy machinery
– Ceiling heights suitable for manufacturing processes
– HVAC systems designed for production environments
– Office-to-warehouse ratios needed for engineering teams
2. **Location Requirements**: Hard tech companies require:
– Proximity to specialized talent pools
– Access to research institutions and universities
– Clustering near similar companies for knowledge sharing
– Locations that attract highly skilled workers
3. **Regulatory Considerations**: Manufacturing operations face different regulatory requirements than warehousing:
– Zoning restrictions may limit manufacturing in areas zoned for warehousing
– Environmental permits may be more complex for manufacturing
– Utility access and infrastructure needs differ significantly
## Revised Investment Opportunities
Based on this updated perspective, we’ve revised our assessment of key opportunity areas in Los Angeles industrial real estate:
1. **Manufacturing Conversion Opportunities** *(Elevated Priority)*: Properties suitable for conversion to manufacturing use, particularly those with:
– Higher power capacity or upgrade potential
– Stronger floor load capacity
– Flexible floor plans adaptable to production
– Locations in or near South Bay innovation clusters
2. **Hard Tech Clustering Zones** *(New Opportunity)*: Properties located within existing hard tech clusters, particularly in:
– El Segundo
– Torrance
– Hawthorne (near SpaceX)
– Redondo Beach
– Manhattan Beach
3. **Last-Mile Distribution Facilities** *(Reduced Priority)*: While still valuable, these face increased competition and potential oversupply.
4. **Cold Storage and Specialized Facilities** *(Maintained Priority)*: These remain valuable due to specialized requirements and limited supply.
5. **Value-Add Renovation for Manufacturing** *(Elevated Priority)*: Older industrial properties that can be upgraded specifically to meet manufacturing requirements.
6. **Strategic Acquisition of Undervalued Assets** *(Refined Focus)*: Focus on properties with manufacturing conversion potential rather than general warehouse assets.
7. **Alternative Port Strategy Properties** *(Reduced Priority)*: Less emphasis given shift away from distribution-focused strategy.
8. **Data Center Conversion** *(Maintained Priority)*: Industrial properties with robust power infrastructure remain valuable for both data centers and manufacturing.
## Market Outlook with Revised Perspective
The Los Angeles industrial market’s fundamental strengths remain intact, but our outlook has shifted to emphasize:
1. **Adaptive Reuse Wave**: Expect significant capital investment in converting distribution-focused buildings to manufacturing use.
2. **Rental Rate Divergence**: Properties suitable for manufacturing will likely command premium rents while traditional warehouse spaces see continued downward pressure.
3. **Development Pipeline Shift**: Future development may need to pivot toward buildings designed for manufacturing rather than distribution.
4. **Geographic Concentration**: Hard tech demand will remain particularly concentrated in the South Bay, creating micromarket dynamics that differ from broader regional trends.
5. **Long-term Value Creation**: The upcoming AB 98 regulations (effective January 2026) limiting new warehouse development for properties over 250,000 SF may actually benefit existing properties that can be repositioned for manufacturing use.
## Conclusion
The Los Angeles industrial real estate market is experiencing a significant structural shift where the supply of space (optimized for warehouse/distribution) is misaligned with current demand (increasingly from manufacturing, particularly in hard tech sectors). This creates both challenges and opportunities for property owners, developers, and investors who can recognize and adapt to this changing landscape.
The South Bay region, in particular, represents a unique opportunity given its emergence as a hard tech manufacturing hub driven by aerospace, defense, and space technology companies. Investors who can identify properties suitable for manufacturing conversion or those already positioned to serve this market segment are likely to outperform in the coming years despite broader market challenges.
Where to Find Hard Tech Buildings in Los Angeles
Despite higher than normal industrial vacancies, Hard Tech companies are finding it difficult to locate adequate industrial space. Many Hard Tech companies require substantial electical power. They want a free-standing building for U.S. Government clearance, more office space than is typical, a large parking area, and a location to attract engineers. Many Hard Tech companies prefer El Segundo and neighboring beach communities because of its history of aerospace and defense manufacturing. But they will consider other locatons along the 405 corridor from LAX to Irvine, including Torrance, Long Beach and other locations in Orange County. Some Hard Tech Companies will make the difficult decision to split their manufacturing from engineering to find the right facility in the location they want. Other parts of Los Angeles that served as machining centers in the past are located in Gardena/Carson, Commerce/Vernon and parts of the San Fernando Valley. Following are a couple of graphs describing market conditions:
Offerings are scarce in the El Segundo/Beach Cities area. When Hard Tech companies grow, they often look to Torrance, Hawthorne, Gardena, Carson or Long Beach. These cities are close to experienced engineers and they house good production facilities.
Power is a main criteria for many Hard Tech Companies. If you need heavy power, 2000 AMPs or greater, there are only a few buildings with the necessary capacity in each square foot range.
Rents hover between $1.50 to $2.25 Gross per square foot per month depending on location and amenities.
If you are seeking a new building or have questions about Los Angeles industrial real estate, please contact us today.
Thank you,
Jim Klein, SIOR – Jimklein@kleincom.com
Quan Wu – Quan@kleincom.com
It’s 2025 and It Will Never Be The Same
In North Santa Monica, where I reside, we are the lucky ones. Destruction from the fires is just over the ridge. We can walk down the staircase on Adelaide, pass Canyon Elementary, climb back up Rustic Canyon, and be in the center of the burn area in a 15-minute hike. It’s smoky, many residents have left the streets to quiet. Face masks are common and the color of the sky is a tinge of orange. Threats of more wind are in the offing. Today, large convoys of police cars and fire trucks, 15 or 20 in a group, are traveling up the 405 with flashing lights to pre-position.
When we evacuated on the first night, we came to the New Gardena Hotel. It’s Japanese-owned and managed with high standards and a good breakfast. It’s in the center of the Gardena restaurant row with noodles, seafood, Japanese, Korean, and Vietnamese delicacies across the street at Pacific Square and Tozai Plaza. I saw a customer at the hotel who did the same as us, to be near his business. His house was destroyed.
Today is President’s Trump inauguration day in Washington D.C. It will bring a new era of governing. The administrative state will be top of the agenda. If you’ve dealt with local planning agencies and the mounds of restrictions from Green Zone Ordinances, buffer zones, AB 98, Environmental Justice, and other anti-industrial building measures, you can see how far astray local leaders have gone by neglecting basic municipal services. The other initiatives I’ll be watching will be AI, Crypto, and Super Intelligence. These are new agencies headed by talented and experienced executives with histories of founding tech companies. And limited Regulation!
AI is the transforming technology of a generation. Already, AI chat applications provide learning, automation, and useful outputs that merit continual dialog with your AI pal. At our office, we are preparing for the AI future by cleaning our data (parcel records, salesforce, available, and specialty niches) so it can be read by machines. We geolocate each property and create a unique link to build and show relationships. We focus on local properties, especially those that are potential transactions. We follow certain industries and share techniques with colleagues in different markets.
Crypto is a step to the future. An increase in the value of coins and an embrace of crypto by key finance legislators will bring wider acceptance and knowledge. We experimented by building a blockchain on Hyperledger, but we didn’t have enough transactions to justify the instance cost. Now, we are using IPFS, a public decentralized blockchain where cost is low. In Los Angeles, because many properties trade off-market, in quiet transactions, or under new Buyer regulations, there is a blockchain use case to order and provide certainty. Blockchain is helpful when Sellers want to be discrete. You need not trade crypto coins or speculate to use blockchains. Please look for further explanation of how we use IPFS with customary brokerage procedures
In Los Angeles, industrial real estate has gone from frothy to flat. Rents are in decline, sale prices are down, and to the consternation of many sellers, investors have a “large margin of safety” when they make an offer. There is a wide variety of buildings available, especially for warehouse and distribution. One segment of shortage is modern, free-standing, and secure industrial buildings that can meet government clearance. Power and parking are needed for tech-industrial. Multi-tenant units, too, are in short supply.
We create analytics and compare buildings based on attributes and location. Clients can understand the real estate markets by scrolling over and seeing the metadata for each property. We create graphs for tenants, owners, and investors. Originally coded for Streamlit, we migrated to a SQL database and then to Postgres so we could capture location data. We’ll be able to solve some nagging problems with this next revision. Organizing market data in this, or other ways, is a necessary step for adopting new standards.
Our staff has grown to eight people split between sales and administration. We have a 45-year history in South Bay industrial real estate and an office in Gardena for most of that time. We live on deals. Please contact us if we can help with your next industrial deal. In Los Angeles, or anywhere in the U.S.
FAQ on Allowable Uses for 314 N. Wilmington Blvd., Wilmington, CA (City of L.A.)
FAQ on Allowable Uses for 314 N. Wilmington Blvd.
1. **What types of businesses are allowed under [Q]C1.5-1VL-O-CUGU zoning?**
– Retail shops (e.g., building supplies, specialty goods).
– Office spaces for professional services (e.g., medical, legal).
– Community-oriented businesses (e.g., art galleries, fitness studios).
– Small-scale manufacturing with a retail component (e.g., furniture making).
– Eco-friendly or green businesses (e.g., urban agriculture, solar equipment).
2. **Can the building be used for logistics or warehousing?**
– Traditional logistics hubs are not permitted. However, small-scale storage or inventory for retail operations is allowable.
3. **Is ship chandlery a permitted use?**
– Yes, if it operates as a retail/service business providing goods for ships and aligns with C1.5 zoning and CUGU standards.
4. **What restrictions apply to the building?**
– Building height is limited to 45 feet.
– Floor Area Ratio (FAR) is capped at 1.5:1.
– Operations must comply with the Clean Up Green Up (CUGU) overlay.
5. **What uses are NOT allowed under this zoning?**
– Heavy industrial operations, large-scale logistics, or truck yards.
– Any use generating significant noise, pollution, or traffic incompatible with residential proximity.
6. **Can zoning modifications be requested?**
– Buyers can apply for a Conditional Use Permit (CUP) or zoning variance for specific uses not
explicitly allowed.
For further clarification or assistance, contact the City of Los Angeles Planning Department or reach
out to us direct. This FAQ prepared by ChatGPT.
Buyer-Broker Agreements Are Now A California Mandate – 2025
Buyer-Broker Agreements Are Now A California Mandate – 2025
As of the start of 2025, all buyers being represented by a broker will need to agree in writing regarding their business and transactional relationship. In many cases, the broker’s compensation is now being shifted to the buyer. There will be a lot of explaining to do if a buyer wants experienced representation. California Civil Code §1670.50, effective January 1, 2025, mandates that real estate agents representing buyers enter into a written “buyer-broker representation agreement” with their clients. This agreement must be executed as soon as practicable, but no later than when the buyer submits an offer to purchase real property.
Key Provisions in a Buyer-Broker Agreement Include:
- Broker’s Compensation
- Clearly state how the broker will be compensated for their services.
- Include the amount or method of calculation (e.g., a fixed fee, percentage of the purchase price, or other arrangements).
- Specify whether the compensation is contingent on the completion of a transaction or is payable under other conditions.
- Services to Be Provided
- Detail the specific services the broker agrees to provide to the buyer, such as property searches, negotiations, or assistance with purchase contracts.
- Payment Conditions
- Clarify the conditions under which compensation becomes payable, including:
- Whether payment depends on the successful closing of a transaction.
- Responsibility for compensation if the seller offers to pay part or all of the buyer’s broker’s fees.
- Clarify the conditions under which compensation becomes payable, including:
- Contract Duration
- For agreements with individual buyers, limit the duration of the agreement to no more than three months.
- Prohibit automatic renewals of the agreement.
- State that any extensions must be in writing and signed by all parties.
- Termination Clause
- Include conditions under which either party may terminate the agreement.
- Address the buyer’s obligations regarding compensation if the agreement is terminated before a transaction is completed.
- Legal Disclosure Requirement
- Attach or reference the required buyer representation disclosure form as specified in Section 2079.14. This ensures the buyer understands their rights and obligations.
- Signatures
- Include the signatures of all parties (buyer and broker) to validate the agreement.
- Governing Law and Dispute Resolution
- Optionally include provisions regarding governing law (California law) and how disputes will be resolved (e.g., mediation, arbitration, or litigation).
Additional Notes on Compensation
- The agreement should address how compensation will be handled if the buyer purchases a property without the broker’s involvement.
- If a seller or another broker offers compensation, the agreement should clarify whether this reduces the buyer’s obligation to compensate their broker.
AIRCRE has developed two forms for both exclusive and non-exclusive agreements. Both are detailed and protect the broker. I will be curious to see how fund-level investors treat this mandate. First Tuesday has also developed a similar form that is simpler to use. I’m debating which of the two versions is more practical. In either case, we’ve been instructed by our legal counsel to prepare an addendum for every property that is submitted. California has added a layer of complexity to every deal. There is an opportunity in this legislation to modernize our brokerage process, but more about that another time.