A Quiet Quarter Stays Positive
Reflecting on the Tri-Valley industrial market activity for the third quarter of 2018, the activity level was relatively flat in comparison to last quarter. Overall vacancy rate for light industrial and warehouse remain at 2.3 percent and the net absorption was a paltry negative 2,861 square feet. Across the board, rental rates continued to rise from the previous quarter and previous year, rising from a weighted average asking rate of $0.92 per square foot triple net (NNN) to $0.96 per square foot NNN. For most users looking to renew, expand or relocate from outside the market, available building inventory for lease or sale continues to be extremely tight and new building development coming online offers relief only to users who need 75,000 square feet or above. Year-to-date, net absorption is negative 281,683 square feet due to new buildings coming online; compared to last year, absorption was positive 133,265 square feet with 0.9 percent vacancy. Given the traditional Tri-Valley, industrial tenant or buyer is significantly smaller than the speculative big box buildings under construction; these users can expect little availability or rent relief from traditional Tri-Valley industrial owners in the months or year ahead.
Have future reports delivered directly to your inbox - click here to subscribe to this and other regional e-mail delivery lists.