"Heightened traffic at the ports of
Industrial vacancy rates in Orange County are projected to peak at 7.2% in mid to late 2010, up from the current rate of 6.5%. Part of the reason for that is the proximity of ports in Los Angeles and Long Beach. In addition, a strong manufacturing base and lack of new
Meanwhile, Los Angeles County’s
“We are nevertheless bullish on the medium- and long-term outlook for industrial space in Los Angeles,” according to the report. “While ports have seen a dramatic reduction in containers over the past two years, a striking change is in the balance between outgoing and incoming containers — outgoing containers with cargo have been ticking upward this quarter, while inbound containers continue to fall.”
The report also notes that if energy prices begin to rise again, that could also benefit Los Angeles industrial space, with the city’s proximity to ports becoming increasingly beneficial.
In stark contrast, the Inland Empire’s industrial market has seen vacancy rates climb to 12.8%, and rents fall sharply to $0.32 at the end of the third quarter, down from $0.41 in the fourth quarter of 2008.
“As a whole, we expect the market to begin to recover in 2010, but that does not imply that all submarkets will recover,” according to the report. “Specifically, we expect Chino and Temecula to behave much like Los Angeles and Orange Counties, but other parts of the region will wait a long time before experiencing a recovery.”