Market momentum continued from 2013 right into the new year. Sales and leasing activity continued its steady pace — nothing extraordinary, but solid activity in each submarket, and across all product types.

There is no doubt that the South Coast markets are all in healthy condition, with low vacancy rates, and finally signs that lease rates are trending upward. This has been the case for sales valuations for the past couple of years, and seeing upward trends in lease rates bodes well for local investors.

Higher rental rates boost returns for investors who have purchased assets at extremely low capitalization rates, which has characterized the market recovery.

Click here for Pacifica Commercial Realty’s full South Coast market report.

— Mark Mattingly is executive vice president of Pacifica Commercial Realty.