The summary reports conditions of a stabilized market with activity and gross absorption both strong in the second quarter. Gross activity in the second quarter was just under 7.3 million square feet, with investment purchases and lease renewals accounting for 56.3 percent of the total. Demand for industrial buildings in the Inland Empire’s East Valley is expected to continue to keep pace with new supply with second quarter of 2014 absorption figures at just under 3.2 million square feet.
“Due to the lack of available space in the marketplace and historically low vacancy rates, off market and direct deals represent some of the best opportunities. Indeed, these deals are becoming more prevalent in the market,” said Lee & Associates Riverside President David Illsley. “I believe 2014 will prove a great time for owner/users to purchase with interest rates still low and prices still below replacement costs.”
Vacancy rates decreased in the second quarter to 5.26 percent, tightening the market across almost all size ranges. Vacancy rates, which have been on a steady decline the last four years, show more steady decreases in vacancy, as the market remains stable and new construction in smaller building sizes remains limited.
The second quarter summary, which was prepared by Caroline Payan, director of marketing and research of Lee’s Riverside office, also found that actual sales prices per square feet will continue to trend upward throughout 2014 as the supply of buildings offered for sale remains limited. As a result, some owners are trying to anticipate the market upswing in sales prices as the East Valley is now seeing product listed for sale in the triple digit range.
New construction in the second quarter represented just over 10.8 million square feet, with all in the 200,000+ Square feet range. This represents a 2 percent decrease over the previous quarter. Eight buildings completed construction in the East Valley in the second quarter. Six more buildings are scheduled for completion in the 3rd quarter of 2014, with four of the buildings already being pre-leased.
About Lee & Associates
Celebrating more than 35 years of leadership excellence in commercial real estate, Lee & Associates is the largest broker-owned firm in the country with 49 locations across the nation including California, Arizona, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, South Carolina, Texas, and Wisconsin. With more than 750 brokers nationwide, Lee & Associates provides a wide range of specialized commercial real estate services on a local, regional and national level. Additional information is available at www.lee-associates.com.