Southern California Industrial Real Estate Market Q1 2024 Overview
The first quarter of 2024 has shown a mix of dynamics across the Southern California and Inland Empire industrial real estate markets, reflecting both robust activities and emerging challenges. Here's an overview of key trends from recent reports by AIR CRE and CBRE.
Lease Market Dynamics
The direct lease market in Southern California saw a significant increase, with a 51% year-over-year rise in new listings and a corresponding increase in available square footage, highlighting a growing demand (AIR CRE, 2024). Similarly, the Inland Empire reported a notable number of mega-deals, despite some softening in certain size tranches, driven by new developments and move-outs (CBRE, 2024).
Sublease and Vacancy Rates
Both regions experienced a surge in sublease listings, with a 117% year-over-year increase, suggesting potential oversupply or strategic adjustments by businesses (AIR CRE, 2024). The vacancy rate in the Inland Empire rose to 5.9%, up from the previous quarter, reflecting these shifts (CBRE, 2024).
Sales and Pricing Trends
Despite the cooling lease market, the sales sector remained strong. Listings and square footage available for sale increased, and average sold prices per square foot also rose, indicating sustained investor confidence in the industrial real estate sector (AIR CRE, 2024).
Construction Overview
Southern California showed a cautious approach with a decrease in under-construction square footage. In contrast, the Inland Empire maintained a steady construction pace, with 20.4 million square feet still under development, aligning with ongoing project starts and deliveries (CBRE, 2024).
Market Outlook
The current state of the industrial real estate market in Southern California and the Inland Empire is complex, marked by both opportunities and challenges. The increase in listings and sales activities indicates a healthy market, yet the rise in sublease offerings and vacancies signals underlying issues that need careful navigation.
For ongoing updates and more detailed analyses, industry stakeholders are encouraged to engage with the evolving market landscape thoughtfully, leveraging insights from trusted sources like AIR CRE and CBRE.