The summary reports that any uncertainty that may have existed in the first quarter of 2012 seems to have dissipated in the second quarter of the year. Both activity and gross absorption were strong in the second quarter indicating that the market is continuing to stabilize, and positive absorption is expected to continue throughout 2012.
Gross activity in the second quarter was more than 5.6 million square feet, with investment purchases and lease renewals accounting for only 24 percent of the total. Investors are still pursuing assets, but users are now taking advantage of record low purchase prices more frequently. Existing tenants are still actively renewing leases, taking advantage of low market rental rates and landlord concessions, however, many tenants are taking the opportunity to expand into larger spaces while rental rates are still low.
Industrial buildings located in the Inland Empire’s Enterprise Zones and Inland Ports directly benefit from activity at the Ports of Los Angeles and Long Beach. The port system as of first quarter recorded increased activity compared to the same period in 2011, helping to fuel the 12 lease transactions that closed in buildings totaling over 100,000 square feet in the second quarter. Port related users are moving to the Inland Empire seeking newer facilities, larger truck courts and distribution areas.
“This is a promising report and further indicates that the industrial market and vacancy rates continue to stabilize,” said Lee & Associates Riverside President David Illsley. For more information on the Riverside industrial market, visit Lee & Associates Riverside’s web site at: http://leec-
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