IRR-Oakland Mid-Year Viewpoint 2015 Local Market Report - Industrial
Vacancy in the East Bay Oakland market is currently around 3% and is the lowest level of vacancy that the market has experienced in more than 15 years. In the past year, industrial occupancy has increased by a substantial 4.0 million square feet. The remaining vacant space consists predominantly of older or obsolete product, which will limit growth in the near-term. Due to rapid deal velocity and vacancy at historically low levels, rental rates have increased roughly 15% over the past year, with significant increases projected for the foreseeable future. Investors continue to be drawn to the Easy Bay Oakland market in order to increase their Bay Area footprint by adding quality leased product to their portfolios.
With demand significantly outpacing supply, speculative industrial development has picked up steam in the past year throughout not just the East Bay Oakland market but the entire region as well. The current level of development activity is the highest witnessed in the past 15 years.
It is noted that all new development has been warehouse/distribution product, with no new manufacturing projects either completed or in the pipeline. Most of the new industrial development is located in Richmond or Union City. Approximately 2.9 million square feet of industrial product is scheduled to begin construction within the 24 months. Due to the high level of demand, it is unlikely that the scheduled additions to supply will have any meaningful impact on vacancy rates.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.