Vacancy ticks up due to construction deliveries and slowing demand

After nine consecutive quarters of positive absorption, the Los Angeles industrial market recorded 1.4 million square feet (msf) of negative net absorption during the fourth quarter. Much of this negative movement stemmed from the delivery of 3880 N. Mission Road in Los Angeles, which added over 1.5 msfof vacant space to the market. The overall vacancy rate ticked up 40 basis points (bps) over the previous quarter to 2.2%. In comparison, this is up 50 bps from the total vacancy rate of 1.7% reported a year earlier. In the fourth quarter, just under 1.0 msfof new deliveries were recorded, while under-construction square footage rose to 6.3 msffrom 5.0 msfin the previous quarter as demand for new buildings continues.

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