(Save the dates: RealShare Apartments East comes to the Hyatt Regency in Miami, FL, on February 26, and RealShare Los Angeles comes to the Hyatt Regency Century Plaza in Los Angeles, CA, on March 27.)
TORRANCE, CA-Total industrial space in L.A. Metro’s South Bay market—both occupied and vacant—dove from 8.2% in the third quarter of 2012 to 6.6% at the close of the fourth quarter, according to a report from the Klabin Co./CORFAC International. In addition, the total amount of square feet leased or sold rose from 1.04 million square feet in the third quarter to 1.5 million in the last quarter.
Also, net absorption decreased from 534,588 square feet in the third quarter to 284,271 square feet in the fourth quarter, according to David Grote, a partner in the local office of Klabin/CORFAC, who authored the firm’s study. Grote reported that among notable transactions during the fourth quarter was a 215,635-square-foot sale to Tri Modal Transportation at 18626 S. Reyes Ave. and a lease of 143,937 square feet to DHL Global Mail at 921 W. Artesia Blvd.
“With this low level of vacancy, we expect rates to continue an upward trend,” said Grote in a prepared statement.
As GlobeSt.com reported earlier today, availability of industrial building space in a representative submarket of L.A. Metro’s South Bay area continues to decrease after total square footage leased or sold topped 5 million square feet in 2012 for the first time since 2004, according to the report. The fourth quarter of last year was the sixth consecutive quarter of decreases in total space in the key Carson/Rancho Dominguez and 91 Freeway Corridor submarket, says Grote.
“Lease rates firmed in the first half of 2012 and increased in the last half,” Grote said. “Sale prices have increased at a faster rate than lease rates, fueled by a low supply of buildings and low interest rates.”
Grote also explained that the Carson/Rancho Dominguez and 91 Freeway Corridor submarket encompasses approximately 20%—52 million square feet—of the overall South Bay market, which he said is a large enough sample to be representative of the total market.
As GlobeSt.com previously reported, in September 2012 the Klabin Co. represented C&D Zodiac Inc. in a transaction with Warland Investments Co. involving a 85,773-square-foot, long-term industrial lease at Warland Cypress Business Center at 11240 Warland Dr. in Cypress, CA.
In which submarkets are you noticing especially tight industrial vacancy? Tell us in the comment box below.