The Mid-Counties industrial market that straddles Los Angeles and Orange counties has continued its steady recovery through the first quarter.
Vacancy and availability rates decreased due to increased demand and limited supply. Gross activity and transaction volume was off a bit in the year-over-year comparison, but the numbers are at historically solid levels.
More Transactions
Also, the continued resurgence of transactions for buildings between 10,000 and 99,999 square feet is encouraging. There were 44 transactions in that size range in the fourth quarter, totaling 971,393 square feet. That increased to 48 transactions in the first quarter, totaling 1,251,315 square feet.
The three largest transactions played a significant role in positive net absorption, as each tenant increased its total square footage from its previous location.
ULG, a logistics company that relocated from the South Bay, leased 196,800 square feet in Santa Fe Springs; Wesco Distribution expanded into 125,055 square feet in Buena Park; and Kusha Inc. moved from Irvine to an 116,975-square-foot facility in Cypress.
The submarket continues to be highly desirable for tenants that need to be close to the ports but central to Los Angeles, Orange County and the Inland Empire.
Class A space remains in limited supply, and demand will continue to increase, with some of the more functional properties receiving multiple offers, plus ongoing speculative development.
Two Properties
There are two properties expected to be leased in the next few quarters: the recently finished 305,000-square-foot building owned by Industrial Income Trust, and Panattoni Development Co.’s 329,000-square-foot class A distribution facility, which will be completed soon.
And there’s no sign of an increase in the overall availability, as the rate dropped 5.3% from the first quarter of 2012.
The submarket will continue to fare much better than the rest of the steadily improving national industrial markets due to its central location; close proximity to the ports; modern functional industrial base; and clean, safe environment.
Research and analysis provided by CBRE Research.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
