Orange County’s research and development sector experienced 692,520 square feet of gross activity in the first quarter, a 100,000-square-foot increase from the fourth quarter.
The net absorption remained in the black due to the increased activity, ending the quarter with 215,888 square feet. Year-over-year net absorption for research and development space was up nearly 443,000 square feet.
The vacancy rate, with the increased absorption, was down, dropping from 5.2% in the fourth quarter to stand at 4.6%.
Asking Rents
Average asking lease rates for research and development product have begun to increase.
On average, asking rents for the county were up 6 cents from the previous quarter and currently stand at 89 cents per square foot. The first quarter’s average lease rates range from a low of 69 cents per square foot in West Orange County to a high of 99 cents per square foot in South OC.
The 1,117 buildings and more than 43 million square feet of space make the research and development sector approximately 17% of Orange County’s total industrial square footage base.
The majority of the region’s research and development space is in the Greater Airport Area and South Orange County submarkets, which account for 28.4 million square feet, or more than 65% of the total market space.
North Orange County is the third-largest research and development submarket, with a little more than 9.7 million square feet of space. West Orange County, the smallest of the submarkets, has a little more than 5 million square feet of research and development inventory.
Development
Industrial development has started to pick up in Orange County, but it has yet to hit the research and development sector. Strong demand and dwindling supply should start to give developers confidence in building more research and development space.
Relocating companies will continue to look to existing newer projects that offer a strategic advantage to facilitate growth in the coming years.
Data and analysis provided by CBRE Research.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
