Vacancy Falls While Rents Continue To Rise
Key Takeaways:
- This quarter the vacancy rate fell by 30 basis points to end at 1.2%, a near record level as industrial space becomes increasingly scarce in this market.
- Average asking lease rates increased rather dramatically this quarter, up $0.03 per square foot (PSF) triple net (NNN) over the quarter to end at $0.84.
- A large amount of construction remains on the horizon, promising some 2,546,800 square feet. Much of this product will be finished by the end of the year and may increase the vacancy rate when it is completed.
Outlook:
The San Gabriel Valley is one of the few regions in Los Angeles County that has tracts of land available for larger infill development projects. Other past projects in Los Angeles County have been met with great success, often being leased immediately upon completion. As market conditions remain tight in neighboring markets, it is expected that these large projects will have little impact on the future vacancy rate of the region.
This is especially true for larger, more modern buildings that can cater to a last-mile or e-commerce tenants. Few modern distribution buildings are available in Los Angeles County, and future quarters should see these spaces leased up in short order as demand remains at an all time high.
Subscribe
