Lease rates at the end of Q4 2017 closed at $0.88 per sq. ft., an increase of $0.01 since Q3 2017. Year over year, lease rates increased by 4.8% due to an imbalance between available supply and demand.
In 2017, vacancy consistently remained under 2.0%, despite increases in both vacancy and availability. The vacancy rate closed Q4 2017 at 1.7%, up 30 bps from Q3 2017 and Q4 2016.
Although activity levels during the first half of the year were strong, the lack of available supply curbed occupancy gains down the stretch in 2017, closing Q4 2017 and the year with negative net absorption due to the shrinking industrial base.
In 2017, only 2 buildings delivered to the market totaling 222,735 sq. ft., with zero deliveries during Q4 2017. All the new completions during the year were in the West and North Orange County submarkets.