The Peninsula Industrial Pros

Your Commercial Real Estate Source in the San Francisco Bay Area

Kidder Mathews Q2 San Francisco Industrial Report

Another quarter, another dollar.  Here’s the latest update on the San Francisco Industrial Market.  Good news overall and we are starting to see an uptick in rental rates, which were sure to follow the positive net absorptions of the past year and a half.  Concessions are lessening and in certain scenarios, there is competition for space, especially amongst specialized uses such as automotive, food processing and distribution.  Here’s the summary and read the entire report and comparables by clicking below:

Net absorption, a measure of leasing activity, was positive 51,978 square feet in the second quarter of 2012. The decreasing vacancy rate and increasing absorption reflects that industrial market activity is picking up slightly, but is constrained by the lack of new available space. We can predict that vacancy rates will further decrease and absorption will increase, causing higher asking rental rates until new inventory is added.

Historically, the San Francisco industrial market is comprised of much smaller businesses compared to more traditional industrial/distribution markets that support port activity and airport logistics, such as the East Bay and Peninsula submarkets. Yet, the activity in the San Francisco submarkets in spaces under 10,000 square feet has picked up significantly in the second quarter. The smaller business parks in India Basin, Potrero Hill, and Bayshore submarkets have seen vacancies decline by 10% and an uptick in rents of around 5% since the previous quarter.


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