Industrial demand at an all-time high, vacancy at a historic low
The COVID pandemic has dealt a blow to demand across all property categories except industrial and flex. Industrial and flex vacancies have reached all-time low rates of 2.92% and 6.08%, respectively. Industrial demand has been largely focused in warehouse/distribution space. For example, Amazon has leased or developed to own over 5 million SF in the past couple of years. Flex demand was bolstered by an exploding life science sector which has accelerated to record levels.
- Countywide average asking monthly rental rates dipped by $0.02 to $1.35/SF triple-net (NNN).
- Overall vacancy dropped 55 basis points (BPS) to reach 3.80%, dropping below 4% for the first time ever.
- Industrial vacancy fell below 3% while flex vacancy hovers near 6%.
- 3.5 million SF of construction was completed in Q3, with an additional 5.4 million SF under construction that is 28% pre-leased.