San Francisco’s Industrial Vacancy Decreases to 7.0%

 

By Bryce Meyers

The San Francisco Industrial market ended the second quarter 2013 with a vacancy rate of 7.0%.

The vacancy rate was down over the previous quarter, with net absorption totaling positive 440,708 square feet in the second quarter. That compares to positive 49,875 square feet in the first quarter 2013. Vacant sublease space decreased in the quarter, ending the quarter at 184,328 square feet.

Tenants moving into large blocks of space in 2013 include: The Exploratorium moving into 160,000 square feet at Pier 15; Metro Air Service moving into 43,500 square feet at 421 Valley Dr., and Twilio moving into 38,122 square feet at 645 Harrison St.

Rental rates ended the second quarter at $13.43, an increase over the previous quarter.

A total of one building delivered to the market in the quarter totaling 189,000 square feet, with 36,000 square feet still under construction at the end of the quarter.

This trend is compared to the U.S. National Industrial vacancy rate, which decreased to 8.5% from the previous quarter, with net absorption positive 44.6 million square feet in the second quarter. Average rental rates increased to $5.25 this quarter, and 167 industrial buildings delivered to the market totaling almost 17.5 million square feet.

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