Rendering shows Ryan Cos. Pacific Vista Commerce Center in Carlsbad. Rendering courtesy of Ryan Cos.

Rendering shows Ryan Cos. Pacific Vista Commerce Center in Carlsbad. Rendering courtesy of Ryan Cos.

— “That was pretty much unseen for San Diego,” Willingham said.

For example, he said 28 percent of a project Ryan Cos. was building in Carlsbad on spec has already been leased.

Kidder Mathews reported that countywide vacancy rates in the first quarter of 2018 averaged 4.4 percent, a record low which the firm said was holding from the end of 2017.

Cushman & Wakefield reported finding a vacancy rate of 4.8 percent for the first quarter and said that “industrial market fundamentals remain strong.”

“Overall vacancy has hovered (around) the 5 percent mark for the past 10 consecutive quarters, and though settling the past few months, is still at a new all-time low, according to our 15-year tracking,” said Jolanta Campion, Cushman & Wakefield’s research director in San Diego.

Submarkets with the highest vacancy rates, according to Kidder Mathews, were UTC at 12.9 percent and Rancho Bernardo at 8.3 percent.

Those with the lowest vacancy rate included Poway at 1.1 percent and Escondido at 2.6 percent, Kidder Mathews reported.

Higher rents and low vacancy rates are leading to more industrial construction where there is land to build and repositioning of older buildings where there isn’t.

“We are not only seeing asking rental rates increase but we continue to see an increasing trend of renovations of older product to make them more appealing to tenants that is also lifting all boats when it comes to rents,” said Bryce Aberg, Cushman & Wakefield executive director in San Diego. “New and redevelopment remains another point of emphasis in these current market conditions. Cushman & Wakefield is currently modeling 32 industrial buildings totaling nearly 3.3 million square feet under construction, the highest level in 12 years.”

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