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Industrial Report

United States | Northern California

Report | Northern California Industrial Outlook - Q2 2011

Summary

Market fundamentals are slowly improving throughout the region.  Large distributors moving goods through the Port of Oakland are driving leasing activity, particularly in the East Bay and the Central Valley.  Third party logistics firms (3PLs) are also contributing to strong demand for industrial space. Low rents relative to peak levels are encouraging tenants to ink renewals and expansions ahead of schedule, a trend that is more common among large corporate users than among smaller tenants.  Lack of Class A distribution space is already prompting built-to-suit development in some markets.  Tenants retain the upper hand in negotiations in most markets, but this trend could begin to reverse by late 2012. 

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