RIVERSIDE, CA-GlobeSt.com has exclusively learned from the Riverside office of Lee & Associates that absorption in the 100,000-square-foot range remains extremely active as Inland Empire industrial buildings reap the benefits of the Enterprise Zones and the Inland Ports. The firm shared its second quarter 2013 Industrial Market Summary for manufacturing/distribution buildings for the East Valley Market in Southern California's Inland Empire with GlobeSt.com, which shows that following stabilization in 2012, exceptional activity and absorption figures to continue, comparable to those of the previous quarter.

Both activity and gross absorption remain strong in the second quarter continuing the stabilized market trends, says the firm. Absorption in 2012 of just more than 12 million square feet surpassed the figures seen in 2011, a trend that is expected to continue throughout 2013, with second  quarters absorption posting 4.4 million square feet, and a year-to-date absorption at almost 7.8 million square feet.

Gross activity in the second quarter was over 8.2 million square feet, with investment purchases and lease renewals accounting for 47% of the total, says the report. Investors will remain active in the market, however, existing tenants will be proactively negotiating lease renewals and seeking expansions, the report says.

Many tenants consolidated during the recession and made improvements to existing space to house more goods, with their buildings at capacity, a gradual improvement in the economy, growth from the ports and a resurgence in the housing market, tenant expansions will become more prevalent, the report says.

The report, which was prepared by Caroline Payan, marketing & research director of Lee & Associates Riverside, also indicates that a surge in imports during 2013 is having a positive effect on warehouse space.

Vacancy rates decreased in the second quarter to 5.7%, and vacancy rates have now been on a declining path for almost four years from when it reached its peak at almost 20% in the second quarter of 2009. The report illustrates that 2013 will show more steady decreases in vacancy as the market remains stable and construction completions in the smaller building sizes are limited. There are currently no buildings under construction under 200,000 square feet.

“This second quarter report has provided positive information that indicates that the market continues on the road to recovery. As we eagerly look forward to the rest of the year, there does not appear to be any indication that this industrial market will falter in the East Valley in 2013,” says Lee & Associates Riverside president David Illsley.