How industrial vacancy in the East Bay has changed since its record low
Having experienced persistently strong demand and a mismatch in available supply, the East Bay industrial market reached its lowest vacancy rate in Q2 2017
July 17, 2019
- Having experienced persistently strong demand and a mismatch in available supply, the East Bay industrial market reached its lowest vacancy rate in Q2 2017, when the vacancy rate compressed to 1.7 percent. Since then, the market has seen some relief, rising 4.5 percent over the past two years to 6.3 percent in Q2 2019.
- The increase in vacancy has not been even across the market, where the secondary markets of Richmond and Livermore-Dublin-Pleasanton have contributed to most of the increase in vacancy. Over the past four quarters, more than 1.6 million square feet across 3 buildings became vacant and available in these secondary markets, pushing both markets into double-digit vacancy rates. The core market along the 880 Corridor still remains relatively tight, with vacancy at 4.4 percent.
- Transaction timelines have increased significantly which is slowing deal velocity, causing some buildings to become vacant before a new tenant is signed. With demand still outpacing supply, the vacancy rate is expected to decrease as as some large-block deals are likely to be closed in the coming quarters.
Source: JLL Research