New Speculative Development Offers No Relief
Given the increased vacancy rate for the Tri-Valley industrial market rising from 1.5 percent to 2.3 percent between this quarter and last quarter, one might say that for tenants and buyers there appears to be light at the end of the tunnel. The previous two newsletters discussed tenants and buyers casting their nets far and wide for any industrial size or product type and how opportunities continue to elude end users given the extremely tight inventory supply, but what is really happening is that planned industrial speculative development in Livermore is just starting to come online. Still, the overall vacancy rate is extremely low, with a total of 430,765 square feet of light industrial and warehouse buildings available for lease or sale in the Tri-Valley market. Overall rents have steadied somewhat, given the introduction of a large new big-box building in Livermore. The weighted average triple net (“NNN”) rate for the market as a whole was $0.94 per square foot, per month at the end of the second quarter; the number was $0.92 per square foot, per month, NNN at this time last year.
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