Vacancy Falls To Lowest Rate Ever
The San Gabriel Valley consists of 31 cities and 400 square miles, with over 1.8 million residents. International trade, especially with the Pacific Rim, continues to be a vital aspect of the growing economy. The San Gabriel Valley market has surpassed the previous market peak in terms of rents. Exceptionally low vacancy rates and rising rental rates are leading many tenants to consider purchasing their real estate.
Vacancy rates have decreased 10 basis points to 1.1%; the lowest the vacancy rate ever in the San Gabriel Valley.
Sales and leasing activity totaled 1,444,500 SF, broken out into 5 sales (247,700 SF) and 45 leases (1,196,800 SF).
Average asking lease rates held steady at $0.68 PSF NNN. Rents have been steadily increasing as vacancy rates are at historic lows.
Net absorption totaled 297,500 SF for the quarter, the 27th consecutive quarter of growing industrial demand.
There remains 1,635,600 SF of space under construction. The San Gabriel Valley is a tight infill market with few opportunities to develop additional industrial space.
Tight market conditions, limited development and rising industrial rents are expected to persist in the San Gabriel Valley industrial marketplace. The surge in rents is prompting many users to consider buying their properties, however the available inventory is insufficient to meet demand. New projects that completed this quarter will likely be leased or sold in short order, leading to further decreases in the vacancy rate. Market conditions will continue to remain tight as the major industrial drivers of the San Gabriel Valley, import / export businesses, food manufacturing and life sciences, continue to expand.