The mid-counties industrial market seems to be strengthening.
That makes sense, as the economy has been improving and the mid-counties market offers a central location with good access to ports and airports, modern and functional industrial buildings, and a clean, safe environment.
The market offers 132 million square feet of space in Santa Fe Springs, Artesia, Bellflower, Buena Park, Cerritos, Cypress, Downey, La Mirada, La Palma, Lakewood, Los Alamitos, Norwalk, Paramount and Whittier.
10-Year Leases
Two 10-year leases were signed in the fourth quarter: Ahrens Rentals Inc. leased 125,000 square feet in La Mirada, and Melcast Litho took 100,797 square feet in Cerritos. There was a general strengthening heading into 2012 throughout the market.
Gross absorption reached 1,217,392 square feet, with a positive net absorption of 348,303 square feet. That represented an increase in net absorption of 254,704 square feet, or almost triple the 93,599 square feet of increased absorption during the final quarter of 2010.
This positive trend resulted in a 7.8% availability rate for the fourth quarter, compared to the 8.5% availability rate a year earlier. The overall vacancy rate ticked downward to 4.2% from 4.4% in the September quarter.
2011
The mid-counties market had a gross absorption of 7,142,791 square feet in 2011—15% higher than the recent five-year average. Lease transactions accounted for 80% and sales deals the remainder.
Opportunities for industrial users seeking larger class A buildings will continue to be limited, resulting in higher lease rates and speculative development and slightly higher sale prices.
Several larger leases are currently under negotiation.
Chu is a first vice president in the Orange office of CBRE Group Inc.
