Industrial Lease Rates, Vacancies Hit Historic Numbers

The Inland Empire remains one of the most sought-after markets for industrial space as vacancies reach a historical low, according to a third-quarter report from Kidder Mathews. Key market drivers include spiking lease rates as tenants from Los Angeles and Orange County seek opportunities across the metro. Direct asking lease rates concluded the third quarter at $0.85 per-square-foot, a new all-time high.

Direct vacancy levels compressed further in third quarter to 1.6 percent, a historic low. Demand for newer locations has never been higher as construction projects are commonly pre-leased or leased within a couple months, keeping availabilities limited, says Kidder.

Fueled by the rise in e-commerce and the pursuit of perfecting logistical channels, there was no shortage in demand for big-box locations. Transportation-related companies continued expansion efforts as DHL, National Distribution Centers, Unis and XPO Logistics were some of the top leases in the third quarter.