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Airport Area Industrial Sees Pickup in Q4

The industrial sector of the Greater Airport Area saw improvements in the fourth quarter compared with the first three quarters of last year.

Gross activity totaled 580,242 square feet, up slightly from the third quarter but still down significantly from a year earlier.

The Greater Airport Area includes parts of several cities near John Wayne Airport. Its portion in Santa Ana led the pace in the fourth quarter, accounting for 65% of the gross activity.

Q4 Absorption

The increase in gross activity in the fourth quarter led to 213,495 square feet of positive net absorption for the period. It was the only quarter of positive absorption for industrial during the year. The area recorded 702,146 square feet of negative net absorption for all of 2012.

The industrial market’s manufacturing-and-warehouse segment accounted for the majority of the positive absorption in the fourth quarter, with 181,495 square feet. Research and development chipped in with 32,000 square feet.

Average asking lease rates in the industrial sector got a lift in the fourth quarter.

The average for manufacturing-and-warehouse space was 62 cents per square foot in the fourth quarter, up a penny from the prior period and 6 cents higher than a year earlier.

The average asking lease rate for research-and-development space was 87 cents per square foot in the fourth quarter, up 5 cents from the prior period and 3 cents from a year earlier.

Larger Recovery

The improvement in the fourth quarter reflected the larger economic recovery.

Orange County added jobs in 2012, and the unemployment rates dipped to 6.8% by December. The manufacturing sector wasn’t a significant contributor to local employment gains, but it is expected to improve through 2013. Distribution jobs are also projected to grow, with an additional 2,500 positions expected this year. Manufacturing is expected to add about 1,700 jobs.

—Analysis provided by CBRE Research.


The Real Estate Watch Chart

Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.

CLICK HERE to download the current REAL ESTATE WATCH CHARTS

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