RIVERSIDE, CA—The Riverside office of Lee & Associates exclusively shared its first quarter 2014 Industrial Market Summary with GlobeSt.com for manufacturing/distribution buildings for the East Valley Market in Southern California’s Inland Empire. The summary, which reports activity and gross absorption exhibiting stabilized market trends, shows activity in the first quarter in 2014 was just over 5.1 million square feet, with investment purchases and lease renewals accounting for 38% of the total.
The report follows a robust 2013 in the East Valley, which had absorption at a historic high at just under 14.8 million square feet, which surpassed the figures seen in 2012, the largest amount of square feet absorbed annually in the history of this marketplace.
“The first quarter report indicates we seem to be picking up from where we left off in 2013,” said Lee & Associates Riverside president David Illsley. “Demand for industrial property remains high as absorption figures are just under 3.2 million square feet and we expect the East Valley to remain a great place for owner/users to purchase with interest rates still low and prices still below replacement cost.”
Because of a lack of quality available industrial space in the marketplace, the report also indicates that tenants will remain where they are rather than relocate to another facility.
The first quarter summary found that both the average asking and actual sale prices per square foot increased in the first quarter. Actual sales prices per square feet are expected to trend upward throughout 2014, as the supply of buildings that are offered for sale remains limited. In addition, the report says that 2014 will show more owners are willing to list their buildings as they are realizing they can now make a profit by selling. However, many small investors may hold back due to taxation and not wanting to exchange into properties with less value or upside, the report says.