Like the majority of Orange County, the North and Central submarkets saw much of the same market trends in the fourth quarter.
This market includes more than 3,400 commercial properties totaling nearly 179 million square feet. With the exception of the office sector, industrial and retail space holds an average vacancy rate of less than 10%.
Construction of space remains almost nonexistent, with only 496,000 square feet of industrial space in development.
Demand continued to show slow momentum in fourth quarter, as seen in the negative 691,000 square feet of absorption.
The vacancy level for office space in North and Central County increased to 17% from 15.3% in the fourth quarter of 2008. This decline in occupancy can be partially attributed to 186,256 square feet of negative absorption that occurred in the fourth quarter.
Average asking monthly lease rates for available space in these submarkets continue to decrease, dipping 3 cents from the previous quarter to $2 per square foot.
The industrial market, which is made up of 2,539 manufacturing and warehouse buildings and 184 research and development buildings, actually saw a pick-up in activity last quarter.
There were 1.2 million square feet total gross leases and sales recorded in the fourth quarter, an increase in activity of more than 50%.
Despite the increase, additional vacant space did come on to the market, which led to 436,365 square feet of negatively absorbed space. This also led to an increased vacancy rate, which now stands at 5.8%.
On the retail end, the vacancy rate in the 278 retail centers ticked up to 8%.
There was negative 68,645 square feet of absorption recorded last quarter. No new retail centers are in the construction phase, leaving the county with 43.8 million square feet of retail space.
The average asking lease rate declined from $2.31 in the third quarter to $2.29 per square foot in the fourth.
Data and analysis by CB Richard Ellis Group Inc.
