Rents Increase To Historic High
The San Gabriel Valley consists of 31 cities and 400 square miles, with more than 1.8 million residents. International trade, especially with the Pacific Rim, continues to be a vital aspect of the growing economy.
Rents in the San Gabriel Valley market have surpassed previous peaks. Exceptionally low vacancy rates and rising rental rates lead many tenants to consider purchasing their real estate.
- Average asking lease rates increased $0.02 Per Square Foot (PSF) Triple Net (NNN) to end at $0.70 PSF NNN, the highest for the San Gabriel Valley. Rents have steadily increased as vacancy rates hit historic lows.
- Vacancy rates decreased 40 basis points to 1.5% as new buildings finished construction.
- Sales and leasing activity totaled 2,079,700 square feet (SF), which breaks down into 14 sales (733,600 SF) and 45 leases (1,346,100 SF).
- Net absorption totaled 369,800 SF for the quarter, the 28th consecutive quarter of growing industrial demand.
- A total of 1,772,300 SF remains 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 market. The surge in rents is prompting many users to consider buying their properties, however 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.