Orange County’s research and development sector was busy during the third quarter, but the activity didn’t point to improvements in the marketplace.
The sector saw 306,383 square feet of gross absorption in the third quarter, up nearly 10% from a year earlier. But that was more than offset by tenant losses and the sector ended the quarter with 342,488 square feet of negative net absorption.
The results pushed vacancy rates for the third quarter up to 4.6% from 3.8% in the second quarter. The third-quarter vacancy rate also topped the 4.5% recorded a year earlier.
A lack of construction pushed the availability rate down slightly to 9.8% from 10% in the second quarter.
The average asking lease rate for research and development space fell to 86 cents per square foot, down three cents from the second quarter. The rate was down from an average of 92 cents per square foot a year earlier.
Average asking rates in the third quarter ranged from 74 cents per square foot in West Orange County to 96 cents per square foot in South Orange County.
Research and development represents about 17% of the county’s total industrial space, with 1,077 buildings accounting for about 42 million square feet of space.
The majority of the research and development space is in the area around John Wayne Airport and in South County—the two areas account for 27.7 million square feet, or more than 65%, of the total.
North Orange County is the third largest area for research and development space, with about 9.6 million square feet.
West Orange County has nearly 4.9 million square feet of research and development space, the smallest in the county.
No new research and development buildings are under construction locally.
Data and analysis provided by CB Richard Ellis.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
