Vacancy Slightly Lower & Rents Slightly Higher
- The vacancy rate fell 10 basis points this quarter to end at 2.1%.
- Average rents increased by $0.01 per square foot (PSF) triple net (NNN) over the previous quarter to end at $0.83, a new high-water mark for this market. Over the past 12 months, asking rents have increased by $0.06 PSF NNN or 7.8%.
- Sales and leasing activity totaled 1,398,500 square feet this quarter, which is average for this market. There were 29 leases in 1,314,400 square feet of space and only three sales, totaling 84,100 square feet.
- Net absorption registered positive 112,700 square feet this quarter, yet remains negative at - 631,000 square feet for the year.
Asking rents have continued to increase as strong tenant demand and few development options have led to a shrinking supply of available space. Recent interest in last-mile distribution centers has put increased focus on the Mid-Counties, which is the geographic heart of Southern California.
Small and mid-sized companies face a similar situation as dwindling supply is driving up asking rates, which have continued to hit a new high water mark every quarter for the last two years. As rents continue to rise, industrial users continue to purchase real estate for their businesses, which is further driving up sale prices.