Demand Up for Commercial Space
According to CB Richard Ellis, the commercial real estate services firm, commercial real estate is beginning to show signs of recovery nationally.
Locally, strong consumer sales during the fourth quarter of 2010 and increased levels of container traffic at the ports in Los Angeles and Long Beach, Calif., have combined to cause an uptick in demand for industrial space as some businesses look to expand their facilities to support added freight activity. As a result, vacancy rates for industrial real estate in Greater Los Angeles dropped from 3.5 percent in mid-2010 to 3.3 percent by the end of the fourth quarter.
“Heading into 2011, the Greater Los Angeles industrial market should continue to see modest activity levels as firms begin to hire again with increased consumer spending hellip; but the average pace will still be below prerecesssion levels,” said CB Richard Ellis’ “Marketview” report.
According to CB Richard Ellis’ research, Vernon, Calif., has a 1.9 percent direct vacancy rate in industrial real estate—the lowest direct industrial vacancy rate in the Greater Los Angeles area. Ventura, with 6.4 percent, has the highest industrial vacancy rate. Los Angeles has a 2.4 percent direct vacancy rate.
As vacancy rates have continued to drop, the weighted asking-lease rates for industrial space have continued to decline. In the fourth quarter of 2010, industrial space in the Greater Los Angeles area leased for an average of $0.54 per square foot—holding steady from the third quarter of 2010 but representing a 2 cent decrease from the same time in 2009. In the first quarter of 2008, the average asking-lease rate was $0.73 per square foot. —Erin Barajas
