San Gabriel Valley/Los Angeles Industrial Market
The Los Angeles industrial market remains the tightest market in the country. All five sub-markets have historically low vacancy rates and little availability. This in turn is fueling fewer deals overall due to limited supply. Tenants are finding it extremely difficult to expand to larger spaces due to the low inventory levels. The overall vacancy rate in Los Angeles is 1.4%.
The largest deal in the San Gabriel Valley this quarter went to FedEx who moved into their new Arcadia distribution center. They leased 450,000 SF at the Arcadia Logistics Center.
The vacancy rate for the San Gabriel Valley is hovering at 1%. The average rent for warehouse space is $0.82 PSF. Construction activity has increased throughout 2017 at moderate levels.
Port container traffic is up 6.9% from 2016, unemployment rates in California and Los Angeles specifically are down anticipating the industrial market to remain strong. Interest rates are expected to increase in 2018 which will affect the double-digit price growth. Rents are expected to continue to increase due to limited inventory by 4-6% in the coming year.
San Gabriel Valley/Los Angeles Office Market
There is currently over 1.5M square feet of office under construction in the greater Los Angeles area. Throughout 2018, approximately 1.6M SF of office is expected to be delivered to the Downtown which still has a vacancy rate lingering at 18.2%. An estimated 3.3M SF is under renovation into creative offices throughout the great LA market. The majority of office space in downtown LA is occupied by industries that have been there for decades mainly legal, financial, insurance, oil and government services.
The San Gabriel Valley office market experienced a decrease in the vacancy rate falling 0.02% to 13.8%. There is currently 77K SF of office construction currently underway. The average rental rate is $2.22 PSF.
Top Commercial Realty recently closed escrow representing the buyer, Foothill Unity Center, on the purchase of a 28,616 SF office building in Monrovia from World Vision.