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Industrial Report

United States | Northern California

Report | Northern California Industrial Outlook - Q1 2011

Summary

Leasing activity improved by 26.9 percent on a quarterly basis during the first quarter, driven by strong activity in Sacramento and the East Bay.  Food-related users drove demand in the East Bay and Sacramento, while distribution firms and materials suppliers drove demand in the Central Valley.

Rents are poised for growth after several quarters of weak demand.  Small blocks of industrial space are plentiful, but large blocks of space exceeding 500,000 square feet are few, which could lead to built-to-suit construction in the coming quarters. This year will be a period of recovery, but stronger market conditions should emerge in 2012.

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