Industrial demand at an all-time high, vacancy at a historic low
Except for industrial space, the COVID-19 pandemic has negatively affected most segments of the commercial real estate sector. Logistics, life science, e-commerce, and manufacturing companies were generally insulated from or, in some cases, thrived during the pandemic conditions in 2020. Demand equating to 4.1 million SF of net absorption over the past 12 months is the most recorded since the 12-month period ending in Q4 2015 (4.2 million SF). Construction activity continues to be robust, and vacancy is poised to fall – for the first time ever – less than 4% by year-end. As industrial sector users continue to grow locally, 2021 is forecasted to record the most industrial market absorption ever.
- Countywide average asking rental rate increased by $0.01 to stand at $1.37/SF.
- Vacancy dropped 52 basis points (BPS) to reach 4.29%.
- At the current rate of demand, vacancy is likely to fall below 4% by year-end, the lowest rate ever.
- 5.8 million SF is currently under construction, 84% of which is in Otay Mesa.