Industrial users across the Valley grew and became increasingly diverse. Manufacturing, third-party logistics, pharmaceutical, e-commerce, and food and beverage users were particularly active in the metro and data center users increasingly expanded their local presence.
Net absorption totaled 1,090,607 sq. ft. in the fourth quarter and 9,781,257 sq. ft. for the year, slightly below the level of activity one year ago of nearly 9.9
million sq. ft., yet the second-highest level since 2005.
Following six consecutive quarters of decline, vacancy increased 80 bps over the quarter to 6.5%. On a year-over-year basis, vacancy fell 30 bps to its
lowest year-end rate since 2005. The nominal rise in vacancy over the quarter was largely due to the volume of speculative development that came online.
The market-wide average asking lease rate of $0.63 NNN per sq. ft. in Q4 2018 was static over the previous quarter and down slightly from $0.64 per
sq. ft. last year.
Year-to-date completions totaled 9,020,356 sq. ft. Currently, 6,084,711 sq. ft. of industrial space are underway, with build-to-suit projects accounting for 35% of
Strong employment and population growth will further support the robust local industrial sector. The flurry of tenant activity, as highlighted by consistent positive net absorption, is being met with the addition of new industrial product.