The industrial market in California’s Central Valley has undergone a turnaround in net absorption, dropping from its highest positive level since the warehouse boom of 2022 at the beginning of the year to nearly the lowest level in the past 10 years.
The category sank to more than minus 1M square feet in Central Valley in the first quarter, down from the fourth quarter’s positive tally of nearly 3M square feet, according to a report from CBRE. The first three months of this year was only the second time since 2015 that the region has posted negative quarterly absorption; in Q1 2023, absorption dipped into the red at about minus 100K square feet.
The plunge in absorption in the 143M-square-foot market was driven by a handful of sizeable sublease offerings from users who returned premium bulk spaces, according to CBRE.
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