San Luis Obispo County Industrial Market Snapshot
Vacancy in the San Luis Obispo industrial market is 2.5%, which is the same level it was 12 months ago. Meanwhile, the national average increased by 1.4%. During this period, 180 SF has been absorbed, and nothing has delivered. Total availability, which includes sublease space, is 3.9% of all inventory.
Within this market, logistics space is by far the largest subtype with 6.0 million SF in this category, followed by 2.5 million SF of specialized space and 920,000 SF of flex space. At a combined total of 9.4 million SF, San Luis Obispo is smaller than the average industrial market.
Rents are around $16.20/SF, which is a 3.3% increase from where they were a year ago. In the past three years, rents have increased a cumulative 17.0%. Furthermore, this is a structurally expensive market, with rents significantly higher than the national average of $11.80/SF.
About 330,000 SF is under construction, representing a 3.5% expansion of inventory. Moreover, the total market is 39,000 SF larger than it was three years ago.
There have been 33 sales in the past year. Sales have averaged $200/SF, which is also the estimated value for the market as a whole. The most frequent of these transactions have been those of logistics space, with 24 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 70 sales, which have traded for approximately $156 million. The market cap rate for San Luis Obispo is 6.2%, moderately above its trailing three-year average of 5.7%.
Employment and population trends are uneven. The number of jobs has increased 2.1% in the past year, whereas population growth is flat.