Overall Activity Remains Slows as Rents Continue to Climb
The South Bay industrial market continues to see healthy demand despite leasing activity posting below historical averages. The overall availability rate increased for the second consecutive quarter, jumping 100 basis points to 2.6%. Vacancy slightly climbed to 0.9% from 0.8% quarter over quarter due to a few new deliveries that were delivered without a tenant in tow. With the region’s extremely tight market conditions, asking rents have doubled in just two years, as competition for warehouse space is still thriving. The Ports of L.A. and Long Beach also saw a slowdown due to retailers pulling back orders, as economic uncertainty persists with inflation on the rise. Container trade in 20-foot equivalent units (TEUs) is down 1.6 % in Los Angeles and up 4.0% in Long Beach compared to this time last year.