LA Records Record Industrial Rent Rises
Cushman & Wakefield has published its latest report on the industrial property market in the Greater Los Angeles area, accompanied by a “5 Fast Facts” infographic illustrating how supply-side shortages are driving up commercial rents.
According to the report‘s findings, increased demand for logistics space continues to fuel strong leasing velocity, with industrial leasing activity of 22.8 msf at mid-year on track to surpass a record high set in 2015.
Los Angeles posted net absorption of 3.5 msf in Q2 2021 driving its overall vacancy rate to 1.7 per cent, down 30 bps from Q1 2021 and 110 bps lower than Q2 2020’s rate.
With strong demand for space, the amount of available sublease space on the market has also decreased. Greater LA posted a 29.4 per cent quarterly decline in the amount of sublease space and a 67.0 per cent year-over-year decrease. Since hitting its peak in July 2020 when 7.7 msf of sublease space was available, the amount of sublease space has declined by 70.2 per cent.
Sublease availability now accounts for only 10.2 per cent of the total available space on the market, compared to 18.0 per cent at Q2 2020. Rents continue to trend up, increasing by 12.0 per cent year-on-year, and averaged $1.03 psf/mo in Q2 2021.