Can You Name the Only Sector Trumping '09?
Industrial is the only product type in San Diego to recoup more than what it lost in 2009, the worst year of the recession, Cassidy Turley managing director Bryce Aberg tells us. (Though retailers who sell that hat Pharrell was wearing at the Grammys are about to see a spike in sales.)
According to Cassidy Turley's year-end industrial report, Q4 2013 marked the 10th consecutive quarter of positive net absorption. "We've actually gained from where we were at the very peak." The market lost 4.2M SF in '09. Since then, it's absorbed over 6.7M SF--including 2.3M SF last year--and vacancy has declined to 7.8% versus 8.8% pre-recession. The second half of '13 marked the first back-to-back quarters of positive absorption across all industrial products in seven years, which means the improving demand is sustainable.
Bryce sold a 23k SF building at 6675 Mesa Ridge Rd (above) for nearly $165/SF, and leased 47k SF 9940 Mesa Rim Rd for a consideration in excess of $4.6M. Rental rates in the top 10 submarkets, where 80% of the leasing has occurred, increased 10% to 15%. He expects significant movement in rents across the board in the next three to four quarters, due to lack of supply and developable land. "Vacancy has been decreasing, but rates aren't even close to where they were pre-recession."
