09
Jul2014
Voit/CORFAC: Inland Empire Industrial and Office Markets Have Positive Absorption
Contact:Carla Mantecon(714) 978-7880cmantecon@voitco.comInland Empire, CA (July 9, 2014) - Vacancy and Availability in Industrial Market Reach Pre-Recession Levels. The Inland Empire industrial market took significant strides toward continued improvement in 2014 with significant positive absorption for the year thus far, a seven cent or 19 percent increase in asking lease rates, and drops in both vacancy and availability compared to a year ago.
“Overall in the Inland Empire industrial market over the last five years, vacancy has decreased over 55 percent while availability has fallen a jaw-dropping 58 percent,” explains Jerry Holdner, Vice President of Market Research at Voit/CORFAC International. “The substantial decreases in vacancy and availability are contributing to the gains in asking lease rates.”
Industrial vacancy and availability continued trending downward throughout 2014. Vacancy ended the second quarter of 2014 at 5.60 percent, a drop of 3.78 percent from 2013’s second quarter, which is amazing since 12.3 million square feet of new product has been delivered to the market over the past four quarters. Likewise, availability posted a rate of 7.48 percent at the close of the quarter, a substantial decrease of almost 14 percent from a year ago.
As lease rates rise, sale prices are also ticking up, notes Holdner, who attributes this trend to the diminishing supply of industrial product for sale in Inland Empire.
Demand for Office Product Increases. The Inland Empire office market showed continued signs of recovery in 2014, posting almost one million square feet of positive absorption over the past five quarters, and just over two million square feet of positive net absorption since the second quarter of 2011, the most positive absorption seen since 2007. The average asking full-service gross lease rate finished the second quarter at $1.75 per square foot per month, an increase of 1.16% from 2013’s second quarter average asking lease rate, according to a new Second Quarter Market Report from Voit Real Estate Services/CORFAC International.
“This is good news for the Inland Empire market overall,” says Holdner. “The rise in lease rates demonstrates that the market continues to improve, which further supports the recovery we’ve been forecasting for the past 12 to 24 months.”
Another trend to note, according to Holdner, is the continued decrease in the amount of vacant and available space in Inland Empire. “Vacancy has decreased from 18.87% in the third quarter of 2009 to 13.57% in the second quarter of 2014.”
As the recovery continues, Holdner notes that research-oriented businesses such as leisure, hospitality, transportation, logistics, distribution and construction will lead the way for employment gains in the coming years.
“Overall, we are cautiously optimistic about the Inland Empire market,” says Holdner. “We continue to see improvement in both the office and industrial markets, and we anticipate positive gains moving forward, provided job creation continues and consumer confidence stabilizes.”
About Voit Real Estate Services/CORFAC International
Voit Real Estate Services/CORFAC International is now an 11 office commercial real estate firm that, through its brokerage and real estate management professionals working together, provides strategic property solutions tailored to clients' needs. Combining more than 40 years of expertise in brokerage, investment advisory, financial analysis, market research, real estate management and tenant advisory, Voit provides clients with forward looking strategies that create value for their assets and portfolios.
Voit is a privately held, debt-free firm that has successfully navigated numerous market cycles since 1971 and currently employs more than 250 people. Voit has owned, developed and managed over 55 million square feet of commercial real estate, participated in $1.4 billion of construction projects and completed over $40 billion in brokerage transaction volume. Further information is available at www.voitco.com.
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