### Wonderful Real Estate’s Joe Vargas on Navigating Southern California’s Industrial Market
Although the long-term outlook for Southern California’s industrial market remains uncertain, Wonderful Real Estate President Joe Vargas has a firm grasp on the current landscape.
“We’re operating in an environment where we’re trying to work through three major issues,” Vargas told *Connect CRE*. “The aftereffects of a presidential election, catastrophic fires, and geopolitical pressures such as tariffs. All of this leads to instability, and in my view, transactions have stalled out for the time being.”
Vargas will join other industry leaders on stage at the Hyatt Regency Irvine for *Connect Orange County 2025*, discussing the state of the Southern California industrial market. He views Orange County as an especially favorable place for business.
“Name me a better place to work and live than Orange County,” he said. “It’s just a great environment that provides tremendous tailwinds for businesses, people, and families. To me, that’s the greatest asset of Orange County.”
### A Tenant’s Market
Currently, industrial tenants have the upper hand.
“Those of us in the logistics and industrial business got used to historically low vacancy rates and hyper-growth rents, but that’s not the reality today,” Vargas said. “A lot of new product has been added to the market since 2022. Through the normal course of absorption, we will chip away at the vacancy rate, but for now, it’s a tenant’s market.”
### Strategies for Landlords
A landlord’s strategy largely depends on the debt maturity timetable of a property.
“If you’re a landlord with a ticking clock, you need to find creative ways to make a deal,” Vargas explained. “That might mean beneficial occupancy, delayed lease commencement, or converting dollars into rent or other concessions. You can’t create a deal from nothing—you have to work with what’s in front of you.”
On the other hand, landlords without immediate financial pressures can afford to wait.
“If you don’t have that ticking time bomb of a clock, then you can sit and wait,” he said.
