The year is already off to a strong start. The capital markets activity is already active, with several millions in loans secured. The Phoenix market is also off to a strong start. Here’s a look at this week’s trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.
BY THE NUMBERS
RIVERSIDE, CA—The East Valley Market in Southern California’s Inland Empire posted strong activity and gross absorption in the fourth quarter 2017. Gross absorption for 2017 totaled 16.9 million square feet, continuing on the heels of the great absorption performances in 2016 of 19.3 million square feet and 2015 of 15.3 million square feet. Gross activity in the fourth quarter was 7.8 million square feet, with investment purchases and lease renewals accounting for 54.1% of the total. Overall gross activity will only be constrained by supply, while there are more small-development projects scheduled for delivery in 2018, there is still a lack of supply. Vacancy rates increased slightly in the fourth quarter to 5.72%. The new year is projected to show a stable vacancy rate, although it may rise given a projected moderate increase in new supply. Vacancy is expected to remain at low levels as demand remains strong. Bulk distribution space continues to be in high demand with many companies still moving east of the LA/Long Beach ports to capitalize on lower asking rates and sales prices. The base for the fourth quarter represented 15.5 million square feet under construction, with 92.1% of the total in the 200,000+ square-foot range, a 17.3% decrease over the previous quarter. There were 17 buildings that completed construction in the East Valley in the fourth quarter, with 25 new buildings projected to be completed in the first quarter of 2018. Average asking sales prices per square-foot increased in the fourth quarter with the supply of buildings offered for sale remaining limited. Actual sales prices declined over the previous quarter, primarily due to the quality of buildings sold.