Market Tightens And Rents Remain Unchanged
- Industrial space remains scarce for the San Fernando Valley and Ventura County markets, with vacancy falling 20 basis points from the previous quarter to end at 1.3%, the lowest recorded vacancy rate ever.
- Asking rental rates held steady to end the quarter at $0.79 per square foot (PSF) triple net (NNN). Rents remain at an all-time high and have well surpassed the previous peak of $0.68 PSF NNN seen in 2007.
- Sales and leasing activity totaled 1,348,600 square feet.
- Net absorption was positive 281,600 square feet for the quarter due to several large transactions.
The San Fernando Valley industrial market is seeing a perfect storm as investors shift focus from lower yield core industrial assets towards value-add properties in secondary and tertiary infill markets.
Industrial users looking to find the ideal space to meet their needs will likely have to expand their industrial footprint by taking additional space in soon-to-be-constructed speculative buildings or in build-to-suit projects, as quality space remains hard to find in this market.