Market Report:  
Southwest Riverside County, CA
 3rd Quarter, 2016 


We are pleased to present our Market Report for the 3rd Quarter, 2016. Once you've finished reviewing the report, Click Here to View Our Listings!
 


TEMECULA, CA
Higher Lease Rates, Minimum Vacancy

T h e Temecula industrial sub market experienced positive absorption of 4,638 square feet during the 3rd Quarter of 2016.  The 3rd quarter marks a significant improvement after two back to back quarters of negative absorption; however, market fundamentals remain very stable by historical standards.  The total market vacancy increased to 3.51% as of the end of the 3rd Quarter of 2016.         

 

The va cancy rate in the multi-tenant segment remains very tight and the overall multi-tenant vacancy rate stands at a mere 0.54%.  Rental rates on multi-tenant suites continued their upward march to an average of $0.97 per square foot, on a Modified Gross basis. 

 

There were four (4) sales of industrial properties during the 3rd Quarter of 2016.  As a result of strong market fundamentals, average prices stood at $129.00 per square foot for industrial facilities in Temecula.  The city's unemployment rate increased from the prior quarter to +/- 5.0%.   

MURRIETA, CA 
High Values, Low Inventory   

T he M u rri eta i nd ust ri al sub market ex pe ri en c ed  positive absorption of 9,703 square feet d u r ing the 3rd Quarter of 2016, essentially mirroring the  p r evi ous qua r t erly ab s o r pti on r eadi n g.   The total vacancy rate in the 3rd Quarter remained essentially unchanged at 3.01%.
  
Multi-tenant v ac ancy r at es fell by 91 basis points from the prior quarter, w ith a nearly non-existent v ac ancy rate of 0.23 %.  As a r e s ult, average multi-tenant r e nt al r a t es were higher at $ 0.82  p er s q ua re f oot, on a Modified Gross basis.

 

There were three (3) sales of industrial properties during the 3rd quarter of 2016.  Prices for industrial real estate in Murrieta stood at an average of $136.00 per square foot.  The city's unemployment rate increased slightly to +/- 5.6%.

LAKE ELSINORE, CA
Negative Absorption, Higher Values 

T he L ake E lsi no re i ndust ri al s u b m a rk et ex pe r i enc ed  negative  absorption of 1,811 square feet  du r ing the 3rd  Q ua rt er of 2 016.   With minimal negative absorption, the total vacancy rate was essentially unchanged at 3.4%, slightly increasing f r om t he p ri or qua r t e r and representing one of the City's all time low vacancy rates.

 

Adding to positive local fundamentals, construction is nearly completed on the forthcoming Big Yards Industrial Park, the first such development within the City in nearly nine years. 

 

Multi-tenant segments of the market increased slightly from the prior quarter, with a total multi-tenant vacancy rate of 1.42%.  Average rental rates were unchanged at $0.81 per square foot, on a Modified Gross basis. 

 

There was a single sale of industrial property completed during the 3rd Quarter of 2016.  Average prices in the city are positioned to spike to approximately $135.00 per square foot based on minimal availability and forthcoming new development deliveries.  The city's unemployment rate increased to +/- 7.45%.

2016 MARKET SUMMARY
Excellent Market Fundamentals, Primed for New Development

Following a robust performance in 2015, the local commercial industrial real estate market continues to perform extremely well in 2016.  Industrial market fundamentals remain very strong, putting upward pressure on property values.  During the 3rd quarter, the local market experienced a firming in both rental rates and a dramatic increase in property values.  Historically low vacancy rates continue to lay the groundwork for sustainable increases in property values  across the submarket.  As such, land values will continue to rise as businesses and developers acquire land for future industrial development and business expansion.          


 

It is our opinion that unemployment rates serve as a leading indicator of future property absorption.  Regional unemployment was higher  within the region as compared with 9 months ago, suggesting local labor markets are healthy albeit decelerating.  As such, strong fundamentals coupled with a trend of increased transaction volume in the 3rd quarter of 2016 suggest that activity in the local commercial industrial real estate market will continue to accelerate into 2017.  Expect property values and rental rates to continue to climb for the duration of 2016.  Stable market conditions suggest the sub-market is healthy and ready for further development of commercial industrial projects.    

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 


 


 

Sources: Masino Industrial Consulting, Inc., Xceligent, California EDD 
Masino Commercial Real Estate Services


(951) 795 4550
BRE License: 0190 9860