Oakland Q2 Industrial Market Report & Forecast
I-80/I-880 Corridor Surges with Activity in Second Quarter
On the heels of an extremely positive 2013, the I-80/I-880 Corridor Industrial Market experienced a slight lull in activity throughout the first quarter of 2014, prompting a marginal increase in vacancy rates. However, the momentum sustained throughout 2013 quickly resurfaced in the second quarter. Overall vacancy decreased 1.2 percentage points across all product lines, from 6.8 percent to 5.6 percent, with several larger lease and sale transactions completed within the quarter. This decrease in vacancy marked the ninth time in the last ten quarters that overall vacancy has trended downward.
One of the most notable deals completed in the second quarter was the full-building lease of the newly constructed Cherry Logistics Center in Newark. Amazon’s new grocery delivery operation is rumored to have taken the whole 575,000 square foot warehouse/distribution facility for ten to twelve years with a starting NNN rental rate in the low $0.50’s. The Cherry Logistics Center was the first completed project of many in-progress speculative developments being added to the market. This long term commitment from a Fortune 50 company, pre-completion of the space, is a great indicator of the health of the market.