Lower Gross Absorption On The Horizon
- Sales and leasing activity totaled 2,695,300 square feet this quarter with year-to-date totals of 6.3 million square feet. This is below the 8 million square feet seen in the first three quarters of last year.
- Net absorption was positive 120,000 square feet this quarter with year-to-date totals being negative 371,500 square feet. Industrial demand for older product remains
tepid, especially as rents continue to stay elevated in the Central Los Angeles marketplace.
- Vacancy was flat this quarter at 1.7%. Vacancy may rise in future quarters as new space is delivered vacant to the market.
Asking rental rates have started to flatten out in the Central Los Angeles marketplace but demand continues to remain strong. Developers and investors have 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 remain 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.