LA Basin Report Finished

The crown jewel of industrial reports, the Los Angeles Basin industrial report, is now finished.

It can be found here:

Los Angeles County suffered the worst losses this quarter, with Central Los Angeles posting the worst quarter ever, -2.4 million SF given back. San Gabriel Valley continued to lose space as well, giving back 962K. Most of these space givebacks were in the City of Industry, which is the industrial heart of the San Gabriel Valley.

Both Central Los Angeles and the San Gabriel Valley are under pressure from neighboring Inland Empire.

Vacancy Rate for LA County: 5.4%, up from 4.8% last quarter. Absorption was negative 4 million SF and rents have dropped to $0.54 NNN PSF for the region.

Inland Empire industrial rental rates have continued to fall, ending the quarter at $0.34 NNN, the lowest rental rate in the Basin and and the lowest rates since 2004. An increasing amount of landlords are refusing to publish asking lease rates, preferring to leave them as negotiable. This makes my life harder, since nailing down negotiable rents requires a lot of footwork.

The vacancy rate increased to 15.4%, only slightly higher than 15.1% that was posted last quarter. There is a pretty good chance that absorption will be positive next quarter if leasing and sales activity remains high in the West Inland Empire. I would say that the chance of a declining vacancy rate for the West Inland Empire next quarter is 50 - 50. The pace of givebacks is decreasing and firms are starting to take space. Will be interesting, keeping my fingers crossed.

Orange County is also humming along. Absorption was only negative 411K, but leasing activity remains low and Orange County is not immune from tenants moving to cheaper markets. Rents remained constant at $0.67, the highest in the Basin.