Commercial Real Estate: Industrial space market sizzles in 2013

Not surprisingly from the flurry of deals related to industrial uses in the North Bay in recent months, industrial space had the biggest improvement in vacancy in the North Bay in the fourth quarter.

[caption id="attachment_88138" align="alignleft" width="320"] Sonoma County commercial real estate vacancy, fourth quarter 2011--2013 (source: Keegan & Coppin; click to enlarge)[/caption]

In Sonoma County, 10.0 percent of 24.2 million square feet of industrial space was available for lease at the end of last year, according to estimates from Keegan & Coppin Co. Inc./ONCOR International. That's down from 12.3 percent at the end of 2012 and 13.7 percent a year before that. Industrial vacancy in the third quarter last year was 10.4 percent.

[caption id="attachment_88137" align="alignright" width="320"] Marin County commercial real estate vacancy, fourth quarter 2011--2013 (source: Keegan & Coppin; click to enlarge)[/caption]

In Marin County, where little industrial space has been built in years because of the cost, 4.9 percent of 6.44 million square feet was available in the fourth quarter, down from 6.9 percent at the end of 2012 and 7.8 percent a year prior.

Industrial vacancy plunged faster in Solano and Napa counties, filling up projects under construction and spurring others long moth-balled.

"2013 was one of the strongest years in recent memory for the industrial market in Solano and Napa counties," according to Rob Gerard, research director in the Fairfield office of Colliers International.

The industrial vacancy rate for the 46.35 million square feet of industrial space in both counties, 29.3 million of which is for warehousing, was 7.5 percent in the fourth quarter, down 3.7 percentage points for the year, according to Colliers. The large industrial parks of southern Napa Valley have vacancy rates of 2 percent or less.


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