Vacancy in the San Luis Obispo industrial market is 2.9% and has increased by 0.5% over the past 12 months. Meanwhile, the national average increased by 2.0%.
During this period, there has been 39,000 SF of negative absorption, and 8,900 SF has been delivered. Total
availability, which includes sublease space, is 3.4% of all inventory.
Within this market, logistics space is by far the largest subtype with 6.1 million SF in this category, followed by 2.5 million SF of specialized space and 860,000 SF of flex space. At a combined total of 9.5 million SF, San Luis Obispo is smaller than the average industrial
market.
Rents are around $16.30/SF, which is a 1.4% increase from where they were a year ago. In the past three years, rents have increased a cumulative 13.2%. Furthermore, this is a structurally expensive market, with rents significantly higher than the national average of
$12.00/SF.
About 310,000 SF is under construction, representing a 3.3% expansion of inventory. Moreover, the total market is 81,000 SF larger than it was three years ago. There
have been 21 sales in the past year. Sales have averaged $320/SF, and the estimated value for the market as a whole is $195/SF.
The most frequent of these transactions have been those of logistics space, with 15 sales. This tracks with the overall mix in the market, as the subtype is the largest in San Luis Obispo.
Over the past three years, there have been 66 sales, which have traded for approximately $139 million. During this time, the market cap rate for San Luis Obispo has increased to 6.6%, higher than its trailing three-year average of 5.9%.
Employment and population trends are mixed. In the past year, the number of jobs has increased 1.5% whereas the population has decreased 0.3%.
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