Industrial
With 50 leases and sales in the fourth quarter, 2010 closed with more than 31 million square feet of gross activity, the most since 2006.
This is an improvement of 7.7 million square feet from 2009 and 11.2 million from 2008. A few significant deals closed in the quarter, including a 796,841-square-foot lease by Living Spaces in Rialto and a 656,661-square-foot lease by Komar Distribution in Mira Loma.
The fourth quarter saw the most activity in 2010 with 8.7 million square feet of deals. Leases made up 7.4 million square feet, while sales made up 1.2 million square feet.
The quarter also generated the highest net absorption in 2010 with a total of 3.8 million square feet, a yearly increase of 3.5 million square feet.
The Inland Empire ended the year with a total of 11.4 million square feet of net absorption surpassing the 2009 annual total by more than 5 million square feet.
The Inland Empire’s availability rate dropped to 14.3% in the fourth quarter from the third quarter’s 15.1%, the lowest recorded availability rate since the third quarter of 2008.
The availability rate for buildings 500,000 square feet and larger now stands at 7.8%, or 7.9 million square feet. Talk of speculative building is starting to circulate.
Office
Slow and steady proved to be the theme for the Inland Empire office market in 2010. The region was deeply impacted by the recession. Many office tenants were forced to consolidate and close secondary Inland Empire locations.
These decisions caused the vacancy rate to hit record highs in 2009 and 2010. By the close of 2010, the Inland Empire office market had begun to show early signs of recovery.
The overall Inland Empire vacancy rate decreased to 23.5% in the fourth quarter, down just more than 2% from the third quarter’s 24%. The amount of available space, which includes directly occupied and subleased space, now stands at 27.8%.
The fourth quarter saw improved net absorption, posting a positive 112,855 square feet. The bulk of the demand was seen in the Inland Empire West submarket, which accounted for more than 103,000 square feet of positive net absorption. The Inland Empire East submarket also recorded positive net absorption of about 9,400 square feet.
Construction of office space remains minimal, with just two properties in the building phase, totaling 231,338 square feet. Both are due to be finished next year.
Analysis by CB Richard Ellis’ Global Research and Consulting.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
