Industrial Leasing Activity in Greater LA at Best Levels Since Pandemic
Deal activity in Greater Los Angeles' industrial sector is flying to its highest levels since the beginning of the pandemic. Total gross activity, which includes new leases and sales, in year-to-date through the third quarter was 79.1 million square — the best three-quarter period since 2020, according to a market report from Colliers.
Also, the 26.8 million square feet posted in the third quarter represented a 14 percent increase from the previous three months.
Additionally, net absorption turned positive, going from -1.13 million square feet in the 12 months before to +1.27 million square feet.
Meanwhile, there were plenty of negative trends. Most notably, Greater LA industrial rents continue to be sluggish, as the category saw a 10.3 percent dip year-over-year to $1.24 per square foot. Moreover, that marked the ninth straight quarter of declines, with rents down 29 percent from the peak in the second quarter of 2023.
Vacancy spiked by 90 basis points from the previous 12 months to reach 5.7 percent. That came as "7.4M SF of new supply offset the gains from positive net absorption," according to Colliers.
But here's the good news. While deliveries increased —construction went from 19.57 million square feet to 12.05 million square feet.
"Construction activity fell below 15M SF for the first time in thirteen years," Colliers explained.
That could be a trend to watch in the coming quarters, as industrial landlords hope for better fundamentals across the board. Colliers did not provide an outlook.
Source: GlobeSt/ALM