| |
|
TOTAL VACANCY HITS 2003 LEVELS
Market fundamentals continue to be challenged as consumers cut back on spending and businesses retract due to lack of financing. The dire economic situation continues to have adverse affects on the Central Los Angeles industrial market, most pronounced by the 20 basis point increase in the total vacancy rate, settling in at 3.6% for the quarter. The primary culprit is a 30 basis point rise in sublet vacancy which is having unsettling effects on the overall market. Long term sublease space is driving down rental rates as direct space struggles to compete on a cost basis. Additionally, availability
increased 50 basis points to 7.5%, which may increase vacancy in future quarters, as more available space rolls over into vacant space.
Net absorption was down for the 6th straight quarter, coming in at -423,900 SF, bringing the year-end total to -925,100 SF. On a positive note, activity increased 25.9% over the 3rd quarter, fueled largely by renewal activity and a few large direct deals. There is evidence that this trend will continue through 2009 as a high volume of leases executed in 2004 roll over in term. Sales activity remains constrained, representing only 6.1% of total activity, and there is yet to be any relief in sight. Owner-users and investors, already cash-strapped from a faltering economy, cannot get the financing needed to purchase properties perceived as values in a market with no land availability. While so called, “doom and gloom” scenarios grip the market, many professionals are looking towards 2009 as a possible year of recovery. The 700 billion stimulus package provided by the Federal Government is aimed at getting banks to lend so that a sustained economic recovery may begin.
Contact Evan Parry at 213.532.3247 for more information.
  INDCLA08Q4.pdf
Email Report Link To Your Friend
|
|