Office Construction
By the end of the third quarter, more than 1.8 million square feet of newly constructed office space was delivered to the Orange County market. Indicative of the confidence in the Orange County office market, for the past two quarters approximately 2 million square feet of office space has been under construction. Approximately 1.9 million square feet of office space were under construction during the third quarter and 2.1 million square feet were under construction during the second quarter. South Orange County and the Airport Area accounted for more than 93% of the third-quarter construction activity. A total of 543,466 square feet of construction completions were delivered during the third quarter, up 45% from the third quarter of 1998, when 374,722 square feet were delivered.
Industrial Construction
Much of the new construction started earlier in the year was completed during the third quarter. Almost 2.5 million square feet of new industrial space entered the market during the third quarter, doubling second-quarter completions and pushing year-to-date industrial completions over 5.2 million square feet. Influenced by the large volume of new construction deliveries and the tightening supply of buildable land, third-quarter construction activity tapered to 3.5 million square feet from 7.2 million square feet in the second quarter and 6 million square feet in the first quarter. North Orange County and South Orange County produced the most construction deliveries. Of the space under construction during the third quarter, North County and the Airport Area accounted for more than 75% of the activity.
Retail Construction
During the third quarter, one new community center and one new power center added approximately 700,000 square feet of retail space to the South Orange County base. In North Orange County, an additional power center contributed another 170,000 square feet, which brought the entire retail base for the county to more than 69 million square feet. Seven new centers with 1.6 million square feet of retail space were under construction during the third quarter. The Central Coast and Central sub-markets accounted for approximately two-thirds of the space under construction. Third-quarter 1999 construction significantly outpaced the 1.1 million square feet of new retail space under construction in the third quarter of 1998.
