East Inland Empire First Quarter 2009 Industrial Report

This report is now available. Here it is.

The vacancy rate increased to 23%. This was not only due to construction completions (as was the case in the past) but also tenants shrinking their space.

Big move outs for the quarter include:
405,515 Sf In Moreno Valley (Lowes)
435,860 SF In Rialto (MGA Entertainment)

There were about 50 new listings this quarter that were vacant representing a potential net absorption hit of -2.9 million SF.

There were about 30 listings that were occupied but available, representing around 1 million SF.

So for the quarter, almost 4 million SF of space hit the market, a little less than what happened last quarter.

Since Q1, 2007 15.5 million SF of space has become available and since then the vacancy rate has almost tripled - from 8% in Q1 2007 to 23% in Q1 2009.

I am not really sure you can call it a crash if it lasts 2 (plus) years. A crash conjures up images of a sudden collision and eventually people getting on with their lives. This sinking feeling that I am left with on this market is the only life I can remember.

Despite the spectere of increasing availability some major deals did occur.

517,346 SF In Redlands (Kenco Logistics)
407,948 SF In Moreno Valley (O'Reilly Auto Parts)
289,683 SF In Redlands (Performance Team Logistics)
100,900 SF In Redlands (Madcatz)

Firms still want to come to the East Inland Empire. Just not in the numbers that supported the massive overbuilding that is now our legacy.

We really need consumers to import more goods and we really need the ports of LA / Long Beach to remain competitive long term. We sink or swim on the global economy, and until recently (2007) it seemed like a safe bet.