The total vacancy rate in the 1st Quarter decreased to 3.8%, the city's lowest vacancy rate on record.  Vacancy rates decreased slightly in the multi-tenant market segments, with a total vacancy rate of 5.2%.  As a result, multi-tenant rental rates remained stable and averaged$0.60 per square foot, on a Modified Gross basis.

There were five (5) sales of industrial property during the 1st quarter, 2014.  Sale prices for industrial real estate increased to an average of $92.00 per square foot.  The city's unemployment rate decreased to +/- 6.2%.

The total vacancy rate rose slightly to 4.8%, increasing slightly from the prior quarter. Multi-tenant segments of the market experienced mixed vacancy rates, with a total multi-tenant vacancy rate of 7.3%.  Rental rates remained at an average of $0.50 per square foot, on a Modified Gross basis.

There was one (1) sale of industrial property completed during the 1st quarter of 2014.  Pricing in the city dipped to an average value of $62.00 per square foot for industrial sales. The city's unemployment rate remained unchanged at +/- 9.2%.

The local industrial market is off to a great start in 2014.  Industrial market fundamentals are very strong, putting upward pressure on property values.  During the past 12 months, the local market experienced sharp increases in both rental rates and property values.  Expect historically low vacancy rates to provide the basis for approximately 8% appreciation in rental rates during 2014.  Property values for industrial buildings should achieve a median price of $100.00 per square foot by the end of 2014.  Also, given the limited supply of industrial facilities, expect land values to rise in 2014 as some businesses acquire land for future industrial development and business expansion.          

Unemployment rates will serve as a leading indicator of future property absorption.  Regional unemployment remained unchanged within the region as compared with 12 months ago, suggesting stagnation in the local labor market.  If businesses have greater confidence in economic growth, expect regional employment opportunities to expand during 2014.   

Sources: Masino Industrial Consulting, Inc., Costar, California EDD