San Gabriel Office Market Snapshot
The San Gabriel Valley office market recorded 231,500 square feet of leasing activity, marking at least 100,000 square feet of velocity for five out of the past six quarters. Vacancy dropped by 50 basis points to 14.5% due to positive demand of 56,100 square feet. The overall average asking rent rose by $0.01 to $2.26 per square foot (PSF) full service gross (FSG). L.A. County non-farm unemployment in May 2018 fell to 4.4%, down 10 basis points from 4.5% last quarter. A historical perspective shows a decrease of 40 basis points year-over-year. Over the past 12 months, Los Angeles County gained 63,900 jobs for an increase of 1.4%. Leisure and hospitality (+24,600), professional and business services (+17,300) and educational and health services (+16,200) posted the highest gains.
In the most notable sale of the quarter, Camphor Partners sold 1440 Bridgegate Drive to Niagara Bottling. Less than a year after acquiring the property from Colony Northstar for $27.3 million, Camphor Partners disposed of the property for $30.9 million, or $230 PSF. Niagara intends to occupy the building as its corporate headquarters when it moves in fourth quarter of this year.
Demand climbed to 51,600 square feet after sliding to negative 27,900 square feet last quarter. Among the major move-ins was United Healthcare moving into 17,600 square feet at 4900 Rivergrade Drive in Irwindale.
Positive demand should continue into the second half of 2018, with the likes of QTC Management, Inc. (98,500 square feet), UTC Aerospace Systems (79,000 square feet) and L.A. County Department of Health Services (68,000 square feet) absorbing space by the end of the year.