51.5 F
Laguna Hills
Thursday, Mar 28, 2024
-Advertisement-

Real Estate Watch

Industrial Market

At the close of the final reporting period of 1999, industrial sale and lease activity in the Inland Empire achieved a five-year high of 24.9 million square feet transacted. Almost 5.7 million square feet were transacted in the fourth quarter alone. Net absorption in 1999 topped 15.1 million square feet. The fourth quarter’s 5 million square feet of net absorption doubled the 2.5 million square feet experienced in the third quarter and nearly trebled the 1.8 million square feet experienced a year ago.

Fourth-quarter industrial vacancy dropped to 5.32%, the lowest rate in the past seven quarters. Across the board, vacancy rates in all but one sub-market were in single digits. Rates ranged from a low of zero vacancy in Moreno Valley to a high of 10.62% in San Bernardino.

After a year of continued quarterly increases, the average asking gross lease rate for industrial space slipped 4 cents to 38 cents per square foot, a decrease of 9.5% from the third quarter. In the fourth quarter of 1998, the average asking lease rate was 39 cents per square foot.

A total of 17.2 million square feet of industrial space was under construction at the end of the fourth quarter, the greatest volume of construction activity since 1990. That amount is a 24% increase from the 13.0 million square feet under construction at the end of the third quarter 1999 and a 46% increase year-to-year.

Office Market

Fourth-quarter market indicators signaled a strengthening office market. Office vacancy decreased 7% from the third quarter, to 19.21%, the lowest rate in more than four years. In the past year, vacancy plummeted more than 5 percentage points (22%), from 24.74% in the fourth quarter of 1998.

Approximately 865,000 square feet of net absorption were experienced during 1999. Fueled by strong activity in Riverside, San Bernardino and Corona, the Inland Empire experienced 196,436 square feet of fourth-quarter net absorption.

Lease rates for office space returned to the all-time high rate of $1.12 per square foot set in 1990. For the quarter, average lease rates increased 2 cents (2%) from $1.10 in the third quarter. In the past year, lease rates have appreciated approximately 5% from $1.07.

In the fourth quarter, the Inland Empire office market had one building under construction totaling 75,199 square feet. New construction is diminishing as no new projects are slated to break ground in the near term. The lack of new construction should have a positive effect on the office market. Vacancy rates should continue their downward trend and lease rates should continue to strengthen as more office space is absorbed.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-