Industrial
Many logistics companies continue to seek space here, with the ports of Los Angeles and Long Beach so close. Major players like Panattoni Development Co., CB Richard Ellis Investors, JP Morgan, ProLogis and others continue to enter the market as investors and developers, buying class A distribution building/portfolios with or without tenants.
One of the most prevalent trends in the West centers around increased renewal activity due to limited space availability, coupled with the fact that many companies don’t want to move their operations to the East because of increased transportation costs from the ports.
Despite these trends, gross activity in the Inland Empire East jumped to 3.38 million square feet in the second quarter, compared to 1.76 million square feet in the previous quarter. The West industrial market saw a marginal decline in activity this quarter to 5.33 million square feet, from 5.93 million square feet in the first quarter.
The overall vacancy rate increased to 4.6% in the second quarter, versus 3.65% in the first quarter. The majority of this increase was a result of new speculative buildings completing construction in the East.
Office
Solid tenant demand coupled with limited quality class A office space led to an influx of new construction in the Inland Empire into the second quarter.
The office market added another 275,042 square feet of new office space, with the East office market gaining the bulk of the newly constructed office space this quarter (221,695 square feet).
Rancho Cucamonga was the only office market in the West to add new office space.
Values Rise
As land values in the Inland Empire continue to rise due to the scarcity of land available for development, quoted asking rental rates faced upward pressure and rose to an average of $2.01 per square foot.
Class A office space commanded asking rental rates ranging from $2.25 to $2.50 per square foot.
With land values ranging from $25 to $30 per square foot in the Inland Empire, the office market has reached a pinnacle corner, with office land values exceeding industrial.
Overall net absorption activity remained strong in the second quarter with more than 163,000 square feet of positive absorption.
The overall vacancy rate slightly increased to 8.6% in the second quarter versus 8.04% in the first quarter.
Analysis provided by CB Richard Ellis Group Inc.’s Global Research and Consulting.
The Real Estate Watch Chart – Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
CLICK HERE
to download
REAL ESTATE WATCH CHARTS
Please note: to download the file, you will need Adobe Acrobat Reader installed on your computer. For a free copy of the software,
click here.
