The Central Los Angeles industrial market encompasses approximately 300,000,000 square feet of building area. This market includes the well-known submarkets Vernon/Commerce and Downtown Los Angeles. The Central Market completed the second quarter with an overall (direct and sublease) vacancy rate of 1.32%, which is down from 1.56% a year ago. Factors that attributed to this market’s low vacancy rate included strong buyer and tenant demand and expanding local economy. Planned and Build-to-Suit projects that came online during the quarter represented 473,624 square feet, an increase of 265,000 square feet from the previous quarter. Leasing activity continued its upward trend, comprising 67% of the total market activity.
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A Few Terms: Rates and Lease Types
Availability Rate
The percentage of all space being marketed for sale or lease at a period of time in a given area.
Vacancy Rate
The percentage of all unoccupied space being marketed for sale or lease at a period of time in a given area.
Gross Lease (GRS)
A lease agreement in which the stated rent being paid to the landlord includes property taxes and property insurance.
Gross Absorption
Total number of properties leased or sold for occupancy at a period of time in a given area.
Triple Net Lease (NNN)
A lease agreement whereby the tenant is obligated to pay for all the operating expenses, i.e. property taxes, property insurance, and facility maintenance.