Year Starts With Strong Rent Growth
Key Takeaways:
- Industrial asking rents in the Inland Empire increased $0.03 in the first quarter to stand at $0.65 per square foot (PSF) triple net (NNN). This is the highest reported rate for the region. Landlords continue to be bullish on rates as vacancy rates continue to tighten.
- Industrial demand recorded 5,676,100 square feet of positive net absorption this quarter, leading the vacancy rate to fall 20 basis points to 3.7%, the lowest rate on record.
- Construction completions this quarter totaled 4,389,700 square feet, while 23.7 million square feet remains under construction with most (13,986,600 square feet), being in buildings 500,000 square feet or larger. Rising rents and falling vacancy rates continue to fuel an ongoing building boom in the region.
Inland Empire Industrial Market:
The Inland Empire market remains the most sought-after warehouse and distribution market in the United States with the lowest vacancy rate and highest rental rate of comparable major distribution hubs.
Outlook:
Tightening vacancy rates continue to put upward pressure on asking lease rates. This quarter has seen a noticeable bump in asking rates and landlords remain bullish on future rate increases. Economic headwinds along with threats of an ongoing trade war and concerns of a southern border, remain background noise to an industrial market seeing record-low vacancy rates and record-high asking rates, for now.
Subscribe
