San Gabriel Office Market Snapshot
The San Gabriel Valley office market saw vacancy increase in the fourth quarter of 2016, rising from 11.6% to 14.5%, a 290-basis-point increase. Absorption recorded negative 294,100 square feet (SF), largely due to Southern California Edison vacating San Gabriel Valley Corporate Campus in Irwindale. The average asking rental rate for the market rose incrementally, reaching $2.27 per square foot (PSF) full service gross (FSG) from $2.24 PSF FSG a quarter ago. Despite fluctuations in vacancy, rents have risen for 15 straight quarters since second quarter 2013, but are still short of the last market peak of $2.39 PSF FSG in 2007.
Sales activity primarily consisted of 16839 E. Gale Ave. in City of Industry trading from 881 Avenida Acaso LLC/GRL Partnership to Dragon Dream LLC for $7.1M ($204 PSF).
Leasing activity for the quarter recorded at 122,100 SF. Among the major deals was City of Hope expanding by 38,000 SF at 4910 Rivergrade Rd. in Irwindale.
November 2016 figures for nonfarm employment in Los Angeles County showed unemployment rising slightly 5.1% compared to 4.9% last quarter. This is a 16.4% decrease year-over-year.
Over the past 12 months, Los Angeles County has gained 65,300 jobs for an increase of 1.5%. Educational and Health Services (+21,200), Leisure and Hospitality (+17,300) and Government (+13,500) posted the largest gains. Construction (-4,400) and Manufacturing (-4,200) saw the highest decreases year-over-year.
The San Gabriel Valley office market is comprised of 10.3 million SF and represents 3% of the total office space in buildings 25,000 SF and greater within the Los Angeles basin. Most office tenants located in the San Gabriel Valley are in the information, finance and professional services sectors. In contrast to other markets in Southern California, a large percentage of the space is in low-rise buildings (80%) with the remaining being mid-rise buildings (20%).