Tri-Cities Rents Grow For Fourth Straight Quarter
- Absorption rebounded in the third quarter to record positive 63,700 square feet due to move-ins in Glendale and Pasadena.
- The average monthly asking rate increased to $3.23 per square foot (PSF) full service gross (FSG), marking three consecutive quarters above the previous cycle high of $3.16.
- Transactions for large blocks of space in the Burbank Media District spurred total leasing activity of 662,400 square feet.
- Progress on Lincoln Property Company’s AMLI mixed-use project in Pasadena continued. Located at the north end of the Old Pasadena retail district, the project will feature 200,000 square feet of office space in its first phase.
- Graymark Capital continued to expand their portfolio in the north Pasadena area by acquiring two properties from Hudson America.
The Tri-Cities market continues to be an attractive market for tenants from a variety of industries, particularly entertainment and technology, givens its history as an entertainment hub and its proximity to world-class engineering and science institutions. As such, spaces both new and old, have attracted interest amongst tenants looking to either expand or establish a presence. Occupancies from the likes of WeWork, Disney and Service Titan will help boost demand as well.
Rents, which had flattened as of early 2018, have seen sustained growth for the last five quarters. While it was expected that any fluctuations in rent in the near future would center near the three-dollar mark, the Tri-Cities market may defy those expectations if rates continue to grow 5% year over year.