MARKET DRIVERS
DIRECT VACANCY rates decreased 40% year-over-year (YOY) from 5.9% in 1Q 2021 to 3.5% in 1Q 2022. The total availability rate had a similar drop of 20% YOY over the same timeframe to 5.7%.
ASKING LEASE rates for all industrial property types gained 14.3% YOY to $0.72/SF NNN for 2022. Asking lease rates for warehouses and flex properties were at $0.68/SF NNN and $0.73/SF NNN respectively.
DIRECT NET absorption was at 1.3 million SF for 1Q 2022.
LEASING ACTIVITY dropped 63.5% YOY from 2.1 million SF in 1Q 2021 to 780k SF in 1Q 2022.
SALES VOLUME decreased 21.5% YOY from 1.2 million SF in 1Q 2021 to 973,242 SF in 1Q 2022.
ECONOMIC REVIEW
UNEMPLOYMENT rate for the Sacramento – Roseville – Arden Arcade MSA dropped 39% YOY from 7.1% in February 2021 to 4.3% in February 2022. Unemployment in California stood at 5.4% during February 2022.
TRANSPORTATION, TRADE, AND UTILITY jobs in the Sacramento – Roseville – Arden Arcade MSA gained 5,800 jobs YOY to 168,100 jobs for February 2022.
NEAR-TERM OUTLOOK
ENGINEERING AND LOGISTIC companies are growing and looking to expand; however, demand outstrips the limited industrial space and land availabilities. There are currently 4 million SF of industrial properties under construction to help satisfy manufacturing and warehouse requirements.
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