PLEASANTON, CA—Market conditions in the East Bay continue to favor landlords, specifically, demand is strong in spite of increasing rents and lack of availability. Numerous tenants are currently seeking more than 5 million square feet of industrial space, but efforts to find space are stymied by the area's 4.2% vacancy rate, which means that little room exists for movement within the market. More than 3.2 million square feet of development are underway and of that, 2.2 million square feet will be delivered this year, according to a second quarter report by JLL. As the 13 speculative projects in the pipeline are completed, the market should experience some relief.

That being said, one of the scarce available properties is available no more, with Dermody Properties acquiring a 390,800-square-foot distribution space at Hacienda Business Park. The warehouse/distribution space is situated on a 22.38-acre parcel and includes excess land for future building expansion, resulting in an additional 85,520 square feet. It features 28 to 30-foot interior clear height, 45 dock-high doors with the potential to add more and four grade-level doors, making it an ideal property for logistics-focused companies. The purchase exemplifies Dermody Properties' strategy to acquire or develop properties in land-constrained submarkets of key logistics markets.