0% Industrial Vacancy?

We're so close to zero in OC, and getting there in the IE. Industrial experts tell us landlords have the ball in their court. (No matter how close you are to zero, don't try to divide by it. Big math faux pas.)

PM Realty Group SVP Tim Joyce tells us that the OC/IE industrial markets are both facing a lack of quality buildings. Vacancies at 2.5% in OC and 7.6% in IE. Based in the Irvine office, Tim’s sold or leased over $320M in office or industrial real estate in SoCal in the last five years.

Tim adds that just under 15M SF of industrial space is under construction in both submarkets, which will ease that pressure in the next 12 months. In the meantime, tenants will be facing pricing levels not seen since 2007 (let's turn on Avril Lavigne and get nostalgic), where average asking rents were in the mid- to high $0.60's/SF in OC and mid $0.40's/SF in IE. The tide will shift toward a landlords' market by the end of 2014, he says.

In some ways, IE’s got the edge, since there’s more space for spec. Stirling Capital Investments COO Brian Parno tells us that its Southern California Logistics Centre, a 2,500-acre complex in Victorville, has shot up to 99% occupied, spurring Stirling to build out two existing spec facilities. Recently, United Furniture Industries inked a 505k SF renewal at the complex so it can expand its manufacturing onsite, increasing assembly lines from six to eight. CBRE's Jay Dick repped Stirling Capital and the Bradco Cos’ Joe Brady repped the furniture maker.