Northern California Industrial tenant activity: Pre-COVID-19 to present
Four industries gain in light of COVID-19 uncertainty
May 20, 2020
Percent change in activity by industry
- While the impact of COVID-19 has yet to materialize, tenant activity since mid-March provides some hints into the impact on demand in the industrial market. Activity since mid-March indicates an approximate 5.9 percent decline from 33.2 million square feet across 209 tenants to 31.3 million square feet with same number of tenants active in the market.
- Deals in active negotiation have fallen by 20.5 percent, but the decline has remained steady since week three of the shelter-in-place. The most significant impact seen to date is the increase in deals being put on hold, which has increased by 317.5 percent. Over seven weeks, the square footage of “on hold” deals went from 1.0 million square feet to 4.2 million square feet.
- The industries that have continued to transact during COVID-19 are Biomed/Biotech/Pharma/Healthcare, 3PLs, Auto/Auto Parts/Tires, and Retail/E-commerce. Unsurprisingly, Biomed/Biotech/Pharma/Healthcare is up the most (on a square footage basis) at 63.4 percent. 3PL activity follows with 58.3 percent. Short-term demand for land and space to store excess trailers and vehicles for dealers has boosted Auto/Auto Parts/Tires, and the accelerating adoption of online shopping from shelter-in-place restrictions has driven greater demand for Retail/E-commerce.