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Thursday, Aug 11, 2022

JLL’s Tim O’Rourke Weighs in on ‘Tremendous’ Growth of LA’s Industrial Market

Tim O’Rourke
Senior managing director and team leader
Jones Lang
LaSalle Inc.
Specialty: Industrial real estate
Subspecialty: O’Rourke leads JLL’s Food & Beverage practice group.
Alma mater: UCLA 

Tim O’Rourke serves as a managing director and team leader at Jones Lang LaSalle Inc.

He oversees the brokerage’s Industrial Services Group in Los Angeles and JLL’s Food & Beverage practice group. In the last decade, the team’s transactions total more than 185 million square feet and around $4.2 billion.

O’Rourke was previously a senior vice president at the Staubach Co., which merged with JLL in 2008, where he led the company’s Southern California industrial team.

What made you want to specialize in industrial real estate?
I always enjoyed industrial because it’s tangible. As opposed to other real estate, you’re distributing widgets and gadgets that consumers need, and I appreciate the overall supply chain. … I started with office space before that and got into industrial in 1995.

How does the industrial market now compare to when you first started?
It’s changed dramatically, especially if you look at the landscape of Southern California. Everything was retail back then, but now everything is ecommerce.

What do tenants want in industrial properties? 
It varies depending on their needs and uses and what industry they are in … but for the most part, it’s all about egress and ingress, access to the freeway system and access to labor.

How important is excess land?
It’s very important because there is no excess land in Southern California. Land values have doubled in the last 12 months, and it’s very difficult to develop in California and Southern California. … That dampens the supply as it may take three to four years to get full approval for a project.

You’ve done a lot of work with cold storage properties. Why are those in demand now?
The impetus was 18-24 months ago leading up to the pandemic and then the pandemic where online grocery store sales accelerated. … The other shift is with the closures here. In Southern California, a lot of restaurants are closed, so we shifted from food service to grocery delivery.

What trends are you seeing in L.A.’s industrial market?
(At) the port of Los Angeles this morning (Sept. 22), there (were) 73 ships docked off the coast waiting to unload their cargo, and that’s the highest it’s ever been. If the average ship is 15,000 (container units), we have roughly 64 million square feet of warehouse space sitting on the ocean. … The ocean is becoming our overflow space for Southern California.

Are you seeing more development?
We are seeing more development through California, but it’s a very slow process. … We’re going to start recycling the older projects and building more modern facilities that are taller.

Are you seeing more office- or retail-to-industrial conversions?
We’re seeing some on the retail side, but it is all dependent on zoning. The cities love sales tax, and when you move it from retail to warehouse, you remove that benefit for the local cities. We are seeing some of that depending on the zoning, but it’s limited at this point in Southern California. But we are seeing more of it in other parts of the country.

— Hannah Madans

Keep reading the 2021 Who's Who in Real Estate special report.

Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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