The Housing Chronicles Blog: Inland Empire industrial space vacancies rising

Tuesday, February 3, 2009

Inland Empire industrial space vacancies rising

After providing one of the Inland Empire's most important economic engines over the last two decades, the companies which industrial/warehouse space are either scaling back or giving up leases, leading to a sharp spike in vacancy rates. From an L.A. Times story:

As the regional economy continues to sputter, vacancy rates are beginning to climb at warehouses and distribution centers for industrial goods, putting the already hard-hit Inland Empire at further risk of decline and threatening facilities in Los Angeles and Orange counties as well...

Industrial vacancy in the Inland Empire doubled in the last year, from 6.2% in the fourth quarter of 2007 to 12.4% at the end of 2008, according to figures just released by brokerage Cushman & Wakefield. Hardest hit was the eastern side of the region including the cities of San Bernardino and Redlands, where vacancy has surpassed 22%.

More centrally located industrial properties in Los Angeles and Orange counties are also beginning to feel the pinch, although the modest increases in vacancy rates are still considered healthy by industry standards. Many of those properties are rented to small entrepreneurs who are hunkered down but so far toughing out the economic downturn, industry observers say. Small businesses that do fail are easier for landlords to replace than the large corporate tenants that favor the Inland Empire.

Vacancy in Los Angeles County is 3.3%, up only 1 percentage point from a year ago. Orange County's vacancy is 5.1%, up from 3.2% last year at this time...

Click here for full story.

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