Asking Rents Increase As Space Remains Limited
The Mid Counties remains the tightest industrial market in Southern California, with a vacancy rate of only 0.6%. This has left limited options for firms looking to expand in the region. Average asking rents increased $0.02 PSF NNN over the prior quarter to $0.68 PSF NNN. Rates have surpassed their previous peak of $0.64 PSF NNN last seen in 2007.
The overall vacancy rate was 0.6%, unchanged from the previous quarter. Vacancy has remained below 1% for the last seven quarters!
Sales and leasing activity was 1,694,600 SF for the quarter, including 5 sales totaling 180,600 SF and 26 leases totaling 1,514,000 SF.
Net absorption was positive at 29,900 SF for the quarter. Low building availability is limiting the amount of net absorption that can occur.
There was no new space added to the market this quarter. There remains 2,092,400 SF under construction.
The Mid Counties market has hit a record low vacancy rate of 0.6%. This is putting upward pressure on asking rates which have hit a new market peak. Consequently, there is continued strong demand to purchase real estate assets rather than leasing them.