Asking Rents Peak At Highest Point Ever
Key Takeaways:
- Asking rents have increased $0.01 per square foot (PSF) triple net (NNN) to $0.83. This is a record rate for the Greater Los Angeles Basin.
- Vacancy rates have declined 20 basis points to 2.2%, which is near an all-time low for the region.
- Construction completions were 8,751,800 square feet this quarter and are likely to decline in future quarters.
- The construction pipeline has been reduced to 19,494,800 square feet.
- Net absorption recorded positive 10,282,200 square feet, driven mostly by strong gains in the Inland Empire.
Los Angeles Basin Industrial Market:
The Los Angeles Basin boasts the largest industrial base in the nation, comprising 1.6 billion square feet in buildings 10,000 square feet and greater. It is a relatively decentralized market, with only 20% of the space located in Central Los Angeles and 80% dispersed throughout the region. Los Angeles and Orange counties are fairly built out and mostly infill markets, while the Inland Empire remains the last expansion area for industrial space in the region. The industrial market is beginning to mature, particularly in Los Angeles and Orange counties, as 60% of the buildings in the L.A. Basin are greater than 20 years old.
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