Industrial Vacancy Falls Nearly 2%

LOS ANGELES—The national industrial market is continuing to expand, according to the 2Q14 industrial report from Lee & Associates, which GlobeSt.com has exclusively. Compared to the same time in 2012, vacancy rates have fallen to 7.8%, from 9.4%, as net absorption and gross absorption have been trending up for the past two years.

Industrial development is concentrated in the markets with the most available land, and, for that reason, will continue to grow at a faster pace than infill markets. This is something we have seen here in Southern California, where developers are snatching up the last remaining plots of developable land in infill markets, like the recent REDA Bascom Ventures project launched in the City of Industry. Contributing to slowed growth in infill markets, some cities are encouraging developers to redevelop older industrial areas for multifamily and retail projects. The combination has led to a shortage in quality industrial properties, leaving many users to either settle or wait for a developer to augment the supply.