Flat Market Conditions To End Stellar Decade
- Both asking rents and the vacancy rate have remained unchanged over the past quarter. Asking rents remain at an all-time high of $0.80 per square foot (PSF) triple net (NNN) and vacancy remains near an all-time low of 1.4%.
- Net absorption was positive 198,200 square feet for the quarter and positive 605,500 square feet for the year. Net absorption is expected to be positive in future quarters as well, as new space is delivered to the market will quickly be absorbed.
- Construction activity remained high with 1,388,400 square feet of space set to be delivered within the next 12 months.
San Fernando Valley and Ventura County Industrial Market:
The San Fernando Valley is the most populous region of Los Angeles and home to major motion picture, music recording and television production companies. Much of the industrial infrastructure is devoted to ancillary services for the entertainment industry and to serving the local population. The San Fernando Valley has recently seen an influx of value-add investors continuing to purchase properties in the region.
- 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.