Rents Rise To Highest 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.
- Asking rental rates rose $0.02 PSF NNN to $0.69 PSF NNN. Rents have surpassed the previous peak of $0.68 PSF NNN in 2007.
- Despite vacancy increasing 10 basis points to 1.9% on vacant construction completions, vacancy remains near historic lows.
- Sales and leasing activity totaled 2,123,400 SF, broken out into 15 sales (554,200 SF) and 43 leases (1,569,200 SF).
- Net absorption totaled 569,700 SF for the quarter and 1,535,900 SF for the year.
- Construction activity remained strong at 917,300 SF.
The San Fernando Valley is on the tail end 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.