Leasing Activity Stays High While Sales Dip Slightly
The overall industrial vacancy rate in the Oakland I-80 / I-880 Corridor increased from 2.4 to 2.8 percent in the third quarter of 2022, remaining near the historical low. Construction is starting to meet demand from e-commerce and logistics firms as total net absorption was negative for the first time since the third quarter of 2021. After a rapid ascent over the last three quarters, the combined average asking rental rates for industrial and warehouse properties decreased $0.04 from $1.70 to $1.66 per square foot per month triple net (NNN). The average asking rent for R&D/Flex properties increased $0.05 from $3.61 to $3.66 per square foot NNN. The rise in interest rates have slowed the sales volume and impacted valuations by approximately 15 to 30 percent. This trend is expected to continue for the rest of the year.
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