Vacancy Declines To Lowest Point Ever
The San Fernando Valley is the most populous region of Los Angeles and home to the major motion picture, music recording and television production companies. Much of the industrial infrastructure is devoted to ancillary services for the entertainment industry and population serving industrial warehouses. The San Fernando Valley has recently seen an influx of value-add investors continuing to purchase properties in the region. .
Vacancy declined 20 basis points to 1.8% on continued strong industrial demand. This is the lowest rate in recorded history for the San Fernando Valley / Ventura County marketplace.
Asking rental rates held steady at $0.67 PSF NNN. Rents are still below their peak of $0.68 PSF NNN in 2007.
Sales and leasing activity totaled 1,481,500, broken out into 15 sales (439,500 SF) and 37 leases (1,042,000 SF).
Net absorption totaled 576,400 SF for the quarter and 966,200 SF for the year.
Construction activity has remained strong at 1,326,600 SF.
The San Fernando Valley is in the middle of a building boom. Tight market conditions and rising rents are leading to a much needed increase in supply. As these newly completed buildings are leased up, we expect to see increased investor activity on these newly leased buildings.
For industrial users looking to find the ideal space to meet their needs, they will likely have to expand their industrial footprint by taking additional space in soon to be constructed speculative buildings or in build to suit projects, as quality space remains hard to find in this market. Other alternatives for industrial space include the Tejon Commerce Center which is less then one hour north of the San Fernando Valley.