OAKLAND, CA-Continued economic growth in 2013 drove increased demand from regional industrial users along the 880 Corridor. So says a recent report on the industrial East Bay market from Jones Lang LaSalle.
The positive momentum led to increased activity from small- and mid-sized users seeking 100,000 square feet or less across the East Bay market, says the firm. Users in this size range held a competitive advantage over landlords for much for the year due to the number of available alternatives for lease.
However as leasing activity improved, these users faced decreasing supply particularly within the class A market, say JLL. “Asking rents continue to climb, especially for class A warehouse space, and are approaching 2006 levels in most submarkets.”
Demand from large corporate users has slowed in recent quarters compared to the 12 months ago, in part due to the severe supply shortage of quality warehouse space with proximity to the 880 Corridor, says the report.
Only three class-A spaces larger than 150,000 square feet are available for lease, severely limiting options for distributors with large-block requirements. Two projects are in the development pipeline that will provide +/-one million square feet of high-cubed warehouse distribution product.