Rents & Vacancy Continue To Rise
- Asking rental rates in the Central Los Angeles market have risen sharply and now stand at $0.82 per square foot (PSF) triple net (NNN). While rents have slowly risen over the past 10 years, the pace of rent appreciation has noticeably increased over the past 12 months with current asking rents 23% higher than a year ago. Landlords remain especially bullish on rents and we expect rents to continue to increase.
- Sales and leasing activity totaled 2,161,900 square feet this quarter broken out into 14 sales (520,200 square feet) and 56 leases (1,641,700 square feet).
- Space givebacks totaled 356,900 square feet this quarter, and year-to-date 491,500 square feet has been returned to the market vacant.
- Vacancy rose 10 basis points to 1.9% as industrial demand continues to shrink in this market. 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.
Asking rental rates continue to increase in the Central Los Angeles marketplace as developers and investors put increased focus on value-add infill industrial and last-mile industrial distribution centers. There is now more industrial development in the Central Los Angeles market than at any time in the last five years.
We expect development and redevelopment activity to remains strong in the Central Los Angeles market over the next few years as investors and developers continue to seek value-add development opportunities and last-mile distribution centers in key central locations.