The East Bay industrial real estate market demonstrated resilience and steady demand as it closed 2024, paving the way for promising trends heading into 2025. With over 1.6 million square feet leased in the fourth quarter alone, the region is poised for growth despite broader economic uncertainties.
Leasing Momentum and Key Transactions
The final quarter of 2024 saw remarkable leasing activity with 25 agreements signed, showcasing the market’s strength. Average starting rents for these leases settled at $1.21 NNN, with an average term of 57 months. Significant deals include:
- Forward Air: Renewed 135,860 square feet on Eigenbrodt Way, Union City.
- Chetak: Signed for 126,456 square feet on Whipple Road, Union City.
- US Autoforce: Secured 116,415 square feet at 2000 Maritime in Oakland.
- Nippon Express: Renewed space on Danti Court in Hayward.
- Iron Mountain: Renewed 98,125 square feet on Factor Avenue in San Leandro.
With moderate net absorption reaching 101,000 square feet in the fourth quarter—the highest since Q3 2023—the market enters 2025 on solid footing.
Market Resilience Despite Challenges
Throughout 2024, the East Bay industrial market showed remarkable stability amid economic uncertainty and high federal interest rates. Vacancy rates, availability, and asking rents held firm, even as annual net absorption turned negative for the first time in recent history. Early 2025 occupancy from December leases is expected to help drive a positive start to the new year.
Sales Activity in Transition
While industrial property sales slowed toward the end of 2024, the year witnessed significant investor interest, closing with over $804 million in sales volume, averaging $239 per square foot. The fourth quarter alone recorded four property transactions totaling $143 million.
What to Expect Going Into 2025
The outlook for 2025 brings renewed optimism to the East Bay industrial market. With a new administration pledging to improve the business climate and reduce inflation, landlords and tenants are likely to regain confidence in executing long-term decisions. Tenant concessions are expected to remain prevalent, and rents should hold stable until some of the 10.6 million square feet of available space is absorbed.
Deal activity is anticipated to pick up in the first half of the year, and East Bay industrial real estate will continue to be a key driver of regional growth. Keep an eye on for updates and insights as the market evolves in 2025.
