Rents Hit Previous Peak, Vacancy Hits New Lows
Mid Counties remains the tightest industrial market in Southern California, with a vacancy rate of only 0.6%. This has left few options for firms looking to expand in the region.
Average asking rents increased by $0.01 PSF NNN over the quarter, a 10.3% increase year over year, to end at $0.64 PSF NNN. Asking lease rents have hit their previous peak, last seen in 2007.
The overall vacancy rate was 0.6%, down 10 basis points from the previous quarter. Over the past 12 months, the vacancy rate has decreased 40 basis points from 1.4% reported in Q3 2015.
Sales and leasing activity increased to 1,824,000 SF, including 7 sales totaling 189,400 SF and 38 leases totaling 1,634,600 SF.
Net absorption increased to 206,500 SF due to several new buildings being completed this quarter.
There was 123,600 SF of new buildings completed this quarter while 541,800 SF of space remains under construction.
The Mid Counties market has hit a record low vacancy rate of 0.6% and future quarters could bring further declines. This is putting upward pressure on asking rates which have hit a new market peak. As such, there is continued strong demand to purchase real estate assets rather than leasing them.