The vacancy rate for industrial property in the San Gabriel Valley, already the lowest in the county, continued to decline as some of the last remaining developable land was taken off the market.

The fourth quarter rate was 1.2 percent, down from 1.5 percent in the third quarter and 2.3 percent for the like period a year earlier, according to Grubb & Ellis Co. While the inventory of available space in the 169.7 million-square-foot market slipped, asking rents remained steady at 48 cents per square foot. The asking rent in the year ago period was 43 cents triple net excluding taxes, insurance and maintenance.

The largest deals to close in the fourth quarter were clustered around Fairway Business Center, Grand Crossing and Irwindale Business Center, all mammoth business parks in City of Industry.

Sale and leasing activity, slowing down as inventory dwindled, was at 1.7 million square feet from 2.3 million square feet in the third quarter and 1.8 million in the fourth quarter of 2003.

"If the pace of the demand continues, we'll be running into a problem of very little supply," said Jim Center, a senior vice president at Grubb & Ellis. "There's still way too much money and buyers, both institutional and individual, and not enough product, so it will continue to be a seller's market for the foreseeable future."

Net absorption rate the amount of space taken off the market by new leases was also down to 686,473 from 800,000 in the third quarter.

The October-December period saw one of the last large tracts of land that could be developed disappear from the market when Toledo-based Libby Glass Co. sold the 27-acre parcel that had housed its regional plant for about $15 per square foot to Fremont-based Sares-Regis Group. Libby shut down its manufacturing operation in the third quarter and moved it out of state and is now leasing back space from Sares-Regis for storage and distribution. Sares-Regis plans nine industrial buildings on the site ranging from 21,000 square feet to 105,000 square feet.

"The Libby glass sale was very aggressive and shows how much land is in demand here," Center said. "The deal closed un-entitled, with no (other) tenants waiting."

At the 400-acre Grand Crossing industrial park, Majestic Realty Co. broke ground on an 800,000-square-foot build-to-suit project for Jakks Pacific Inc. Majestic manages the park for Industry East Land LLC, which holds the land in a long-term lease from the City of Industry Development Agency.

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