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4/11/22
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This report provided by real estate services firm Kidder Mathews
Market Highlights
Asking lease rates for all industrial properties were $0.72/SF NNN in 1Q 2022.
Direct vacancy rates decreased to 3.5% in 1Q 2022.
Direct net absorption for 1Q 2022 was 1.3 msf.
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 msf for 1Q 2022.
Leasing activity dropped 63.5% YOY from 2.1 msf in 1Q 2021 to 780k SF in 1Q 2022.
Sales volume decreased 21.5% YOY from 1.2 msf in 1Q 2021 to 973,242 SF in 1Q 2022.
Economic Overview
The 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 msf of industrial properties under construction to help satisfy manufacturing and warehouse requirements.
Sources: CoStar, edd.ca.gov, sacbusinessreview.com, sacbee.com
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