Construction Boom Continues For 2019
- This quarter 345,100 square feet was delivered to the San Gabriel Valley market, of which roughly 33% was pre-leased.
- Construction activity remained strong with 2,099,200 square feet set to be delivered in the next 3-12 months. Most of the space under construction is for larger buildings greater than 500,000 square feet in size.
- The vacancy rate was unchanged at 1.4%. New supply has closely lined up with gains in industrial demand.
- Average asking lease rates increased rather dramatically this quarter, up $0.04 per square foot (PSF) triple net (NNN) over the quarter to end at $0.81. This remains the highest level for asking rents in the San Gabriel Valley, as rents have been steadily rising for the past eight years.
The San Gabriel Valley consists of 31 cities and 400 square miles, with more than 1.8 million residents. International trade, especially with Pacific Rim countries, continues to be a vital aspect of the growing economy. Rents in the San Gabriel Valley market remain at an all-time high. The region still has an exceptionally low vacancy rate, leading many tenants to consider purchasing their real estate.
Industrial development remains strong as several large projects are currently under construction in the San Gabriel Valley. Infill development and last-mile logistics remain top of mind for developers and investors. Continued rising rents and strong tenant demand, especially for larger buildings, will likely lead to increased industrial development in upcoming quarters.