Real Estate Watch: Construction Activity
Constuction Slows, Few Projects in Pipeline
Construction activity in the industrial market slowed markedly last year.
Thirty-three buildings with 1.2 million square feet of space were finished, just under half the construction of the prior year. About 60% of the construction activity has been for buildings smaller than 30,000 square feet.
Work on eight industrial buildings with 170,583 square feet of space was completed in the fourth quarter. The largest of those was 33,742 square feet.
Fourth-quarter completions included three manufacturing buildings at the Voit Brea Business Park and another at 910 Columbia, adding 107,361 square feet to Brea’s industrial base.
The Irvine Spectrum was home to all research and development activity in the quarter, with four buildings totaling 63,222 square feet.
No new construction started during the quarter, keeping current industrial construction activity at 673,837 square feet.
Similarly, office construction had a big dropoff last year after five strong years of development.
Less than 2 million square feet was completed in 2002, 42% of the prior year.
Six office buildings with 654,612 square feet were finished in the fourth quarter, two of which are single-tenant, owner-user properties in Brea and Irvine.
Four other buildings make up the Newport Technology Center, a rehab project with 418,385 square feet of flex space in Newport Beach. That space was vacant on completion.
Two projects broke ground in the fourth quarter: a 42,043-square-foot building at the Irvine Technology Center and Emulex Corp.’s 180,000-square-foot build-to-suit corporate headquarters.
There was 919,235 square feet of office and flex space under construction at the end of the year.
Meanwhile, the retail market geared up for the holiday season with the completion of six new shopping malls with 1.5 million square feet of space in the fourth quarter.
The largest addition was Plaza Pacifica, a 450,000-square-foot community mall in San Clemente. Anchors include Lowe’s, Albertson’s and Wal-Mart.
Another 417,000 square feet of retail space was added to the North County market with the opening of Amerige Marketplace, home to big-box tenants such as Target, Linens & Things, Barnes & Noble and Ross Dress for Less.
The Old Ranch Town Center, a 287,000-square-foot community mall in Seal Beach, was a major addition in West County. Also completed during the quarter: Foothill Gateway plaza in Lake Forest and two specialty centers in the Central Coast, Crystal Cove Promenade in Corona del Mar and the third phase of the Irvine Spectrum Entertainment Center.
There is 2 million square feet of retail construction under way,three community centers and two specialty centers.
No retail construction started in the quarter.
Analysis provided by CB Richard Ellis’ Global Research and Consulting.
