Tri-Valley Office and Industrial Statistics

Tri-Valley Office and Industrial Statistics

December 6, 2018 0 By Chris

As we try to finish up a busy 2018, I wanted to send out a quick snapshot of the Tri-Valley markets (both Office and Industrial).  In general, the market seemed to slow down in the third quarter.

Industrial: We saw a lull in activity at the close of the 3rd Quarter.

  • Average asking for the region was $.95 nnn
  • Vacancy ended up at 4.8%
  • Net Absorption for Q3 was (40,281sf)
  • YTD Net Absorption was (404,635sf)
  • Link to full industrial report

Outlook:

  • Current vacancy is 4.8%in the Tri-Valley industrial market and is expected to increase in the next year as several large blocks hit the market.
  • 89,829 sf of gross absorption was recorded this quarter, while net absorption was -40,281sf. Slow velocity is mainly due to the shrinking demand and limited supply of larger blocks of space.
  • Rents closed the quarter at $.95 psf and are expected to decline over the next twelve months as lower quality space becomes available.
  • There is 332,099sf of new product currently under construction, which has potential to attract regional, good credit tenants.

Office: Rents stall in Q3 but are expected to rise again soon.

  • Average asking for the region was $2.76 full service
  • Vacancy ended up at 12.1%
  • Net Absorption for Q3 was (148,048sf)
  • YTD Net Absorption was (408,924sf)
  • Link to full office report

Outlook:

  • Asking rents closed the quarter at $2.76 psf, edging down from $2.83 in the second quarter. Rents are expected to tick up in the next year when vacancy tightens.
  • Vacancy was 12.1% at the close of the quarter, up +370 bps YoY, and will decrease in the next several quarters as several large leased availabilities are occupied.

For tenants faced with an upcoming lease renewal or relocation, give your broker a call to discuss your requirement and the current market statistics so you can come up with a strategy on how to proceed. Sometimes, it is best to renew but that isn’t always the case. With the slow down in leasing activity for Q3, one might find that landlords are more motivated to offer attractive terms to fill their vacancy.  It pays to shop around.  If you want to reach me directly, please feel free to call me at 510-915-7645.