Big Industrial Buildings are Falling Vacant

Big Industrial Buildings are Falling Vacant

America is going through one of its most challenging phases. It is the real estate industry that has taken the beating in this economic doldrums, the foreclosure crisis. Big industrial buildings are becoming vacant in Southwest Riverside County. Even small businesses that are operating inside smaller buildings have pulled out. In all, 900,000 square feet of space is lying vacant in industrial buildings.

According to a report, vacancies in industrial buildings have gone up to 16 per cent from a level of 9 per cent in the last one year. In San Bernardino and Riverside counties, the vacancy was 12.4 per cent in 2008. In fact, many buildings became vacant in the last one year. In all, 100,000 square feet space is now available in Murrieta and near Collier Avenue in Lake Elsinore and Jefferson Avenue in Temecula. Now workshops and showrooms have opened up in the space.

Many industries located inside the buildings have either downsized or closed. A local distributor, Professional Hospital Supply, will also leave some space when it moves into a new facility measuring 650,000-square-foot. In fact, the vacancy level in the two counties has doubled in 2008. This has been revealed by a Cushman & Wakefield report.

The downturn in the economy is largely responsible for the crash of the real estate market. Hence, there are vacancies now that were not there earlier. This was revealed by a broker with the Almar Real Estate Group. Electricians and other small time businesses like cabinet makers have downsized. Some have even reported such losses that they had to close shop.

According to a report by the Cushman & Wakefield, there is 36,000 square feet of new space in the area. The amount of space that was vacated was much more, as much as 383,000 square feet. This happened because of downsizing and business closure. The total space that was lying vacant has gone up by leaps and bounds. Whereas earlier, there was 475,000 square feet of vacant space, now it is nearly 894,000 square feet.

Experts suggest that a weak real estate market is largely responsible for this. Companies are in a cost cutting mode and as they downsize operations, space is falling vacant. In order to lure tenants, it is imperative for landlords to lower rents. Tenant retention is the mantra now and landlords who understand this have been able to ride the trough. Otherwise, they are doomed.

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