2019 Q1 Greater Los Angeles Basin Industrial Knowledge Report

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Infill Industrial Demand Slowing, IE Remains Strong

Key Takeaways:

  • Net absorption recorded positive 4,875,400 square feet for the quarter.
  • Los Angeles County and Orange County both reported negative net absorption, which was offset by strong positive absorption in the Inland Empire.
  • Asking rents have increased $0.03 per square foot (PSF) triple net (NNN) to $0.77. This is a record rate for the Greater Los Angeles Basin and the pace of rent growth has increased.
  • Construction completions were 5,304,700 square feet, mostly contained to the Inland Empire. There remains 29,586,100 square feet under construction.
  • Vacancy rose 10 basis points to 2.6% due to construction completions and space givebacks in infill markets. Vacancy is likely to remain flat in future quarters as new industrial space is brought to the market. 


Future developments in South Bay will likely require greater scrutiny on the part of developers as the remaining obsolete and under-utilized parcels often come with environmental risks inherent in infill development. The San Gabriel Valley is one of the few regions in Los Angeles County that has tracts of land available for larger infill development projects. Other past projects in Los Angeles County have been met with great success, often being leased immediately upon completion. As market conditions remain tight in neighboring markets, it is expected that these large projects will have little impact on the future vacancy rate of the region. 





2019 Q1 Greater Los Angeles Basin Industrial Knowledge Report

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