Vacancy Spikes On Construction Deliveries
- The vacancy rate rose 70 basis points to 1.8% this quarter. This was due to the addition of 1,354,400 square feet of newly completed industrial space that was brought to the market.
- Net absorption was positive 264,400 square feet this quarter and 1,251,100 square feet for the year. Industrial demand has been positive all quarters in 2019 and is expected to remain positive for the near future.
- Average asking lease rates inched up $0.01 per square foot (PSF) triple net (NNN). This remains the high-water market for asking rents in the region. Rents have been slowly increasing for the past decade and are expected to continue to rise as industrial demand remains positive.
San Gabriel Valley Industrial Market:
The San Gabriel Valley consists of 31 cities and 400 square miles, with more than 1.8 million residents. International trade, especially with Pacific Rim countries, continues to be a vital aspect of the growing economy. Rents in the San Gabriel Valley market remain at an all-time high. The region still has an exceptionally low vacancy rate despite recent additions to the base. Tight market conditions are leading many tenants to consider purchasing their real estate.
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. As market conditions remain tight in Southern California and industrial demand remains positive, it is expected that these larger projects will not linger long on the market.