Overall, the commercial real estate market performed well in the first quarter of 2022. While it wasn’t a perfect score in every sector, there were definite signs of growth and many things to make investors happy.
Lowering vacancy rates
Industrial, office and retail spaces saw either steady vacancy rates or a decline. The declining vacancy rates mean a greater push for companies to move into spaces and do business. This is a crucial bounce-back point.
Construction projects on the rise
There is currently a great deal of square footage under construction for the industrial sector. The Inland Empire alone had 28 million square feet of construction projects, five million more than the previous quarter.
While other counties didn’t quite have that revelatory level of growth, there were still improvements across southern California on the construction front.
Massive industrial market sales
In reviewing the data provided by VOIT real estate services, there were significantly large industrial property sales across southern California. The reports look at the top five sales in each area and show that there were:
- Four sales over $35 million in Los Angeles
- One sale of $225 million and two additional sales over $40 million in the Inland e=Empire
- The top five sales in the Mid-Counties exceeded $30 million, with the top sale being $51 million.
These sale prices prove that the commercial – especially the industrial – markets are extremely valuable right now.
Office spaces are stagnant
If there is anything to be wary of, it is the performance of office space. Offices in Southern California continue their struggle in the post-Covid world. What will reaching the endemic phase look like for these properties? It will be interesting to see.