The industrial market has unarguably been the hottest market inSouthern California—yet surprisingly, the vacancy rate in LosAngeles ticked up in the fourth quarter of 2018. According to arecent report from Avison Young, the vacancy rateincreased nearly a full percentage point to 3% at the end of 2018,up from 2.1% in 2017. For 2019, the report forecasts that thevacancy rate will remain at 3% in 2019. While 3% is still a verytight market—and no reason for users hunting for space tocelebrate—could this mean the beginning of a slow down in theindustrial market?

Chris Cooper, principal and managing directorat Avison Young, says no. “I think it is a blip. I would attributeit to additional construction, and it is really a matter of aproperty being preleased before delivery,” he tells GlobeSt.com.The industrial pipeline in Los Angeles has been growing andcurrently there is more than 4 million square feet of space underconstruction in Los Angeles, according to the report. Theconstruction activity is definitely contributing to the increase invacancy.