Industrial tenant demand shows no sign of slowing despite shrinking size requirements
In a sixth-month period from June to December, total square footage demanded increased by 631,000 square feet, or 9.5 percent in the East Bay.
- In a sixth-month period from June to December, total square footage demanded increased by 631,000 square feet, or 9.5 percent in the East Bay. Despite vacancy at 4.8 percent, tenant demand is strong with 10 additional active requirements, up 20.8 percent from June. Although tenant demand is robust, a 23.4 percent decrease in the average size requirement signals changing economic conditions within the tight industrial market.
- Nine Food & Beverage tenants are in the market, seeking a total of 1,325,000 square feet. Although average size requirements are shrinking across industries, the average Food & Beverage requirement increased by 45,000 square feet, but larger tenants seeking facilities with existing freezer and cooler space have extremely limited options.
- Demand for Logistics & Distribution fell by 40.3 percent, or 562,000 square feet. Part of the decrease in demand can be attributed to RK Logistic’s lease for a 372,000 square-foot built-to-suit in Livermore. Although Logistics & Distribution and 3PLs experienced a decline in demand, e-commerce still largely drives demand for space as traditional retailers expand their online fulfillment operations.
Source: JLL Research