As one of the first industrial regions in the U.S. to recover from the economic downturn, the summary reports that the third quarter continued its stabilization with positive activity and absorption figures to continue through the end of the year.
“In addition to its ongoing stability, the Inland Empire’s industrial property will continue to reap the benefits of its interaction with the international ports of Los Angeles and Long Beach,” said Lee & Associates Riverside President David Illsley. “With more than 40 percent of the nation’s consumer goods coming from the Asian markets and passing though our local ports, about 75 percent of those goods are handled in the Inland Empire before reaching its final destination.”
Demand for industrial buildings in the Inland Empire’s East Valley continued its momentum in the third quarter 2013. Absorption in 2012 of just over 12 million square feet surpassed the figures seen in 2011, a trend that is expected to continue throughout 2013, with third quarter’s absorption posting 1.9 million square feet, and year-to-date absorption at almost 9.6 million square feet.
Gross activity in the third quarter was more than 2.1 million square feet, with investment purchases and lease renewals accounting for only 12.6 percent of the total. Vacancy rates remained steady in the third quarter at 5.7 percent exhibiting a stabilized marketplace. Vacancy rates have now been on a declining path for four years from when they reached a peak at almost 20 percent in the second quarter of 2009. The end of 2013 will show steadier decreases in vacancy as the market remains stable and new construction in smaller building sizes remains limited.
The report, which was prepared by Caroline Payan, director of marketing & research of Lee’s Riverside office, also shows that both average actual and average asking sales prices per square feet increased in the third quarter, a trend that is expected to continue throughout the remainder of 2013 as REO sales have dried up and the supply of quality buildings available for sale remains limited.