The Office Market
The North and Central market areas make up approximately 28% of the total office market in Orange County. Although the northern portion of the Orange County office market is known for having rents lower than the county average, the combined average asking lease rate for North and Central County rose 5 cents in the second quarter. The average rent for North Orange County alone rose to $1.80 per square foot per month, mostly due to construction that was completed in the second quarter. The newly added space pushed the vacancy rate for office space in the North/Central area up to 11.04%, from 10.85% in the first quarter. The vacancy for North Orange County rose as one new building was completed with very little pre-leasing activity. The vacancy rate for Central Orange County dropped in the second quarter, as 39,704 square feet were positively absorbed.
The Industrial Market
The North Orange County industrial market consists of nearly 105 million square feet of space, 91% of which is manufacturing and warehouse-type facilities. Approximately 1.4 million square feet of industrial space was leased or sold in the second quarter, dropping the overall industrial availability rate to less than 5% in the North County. The M & W; availability rate dropped to 4.19%, down from 4.78% the previous quarter, while research and development availability dropped to 9.34%, down from 9.97% in the first quarter. As of the second quarter, there are six M & W; buildings under construction in Anaheim, Brea and Fullerton that will add more than 150,000 square feet to the base upon completion.
The Retail Market
Combined, the Central and North Orange County areas account for approximately 51% of the total retail base. Two retail centers are under development in Central Orange County, one power center and one specialty center. Another power center is under construction in North Orange County. The vacancy rate for retail space in Central County rose to 8.01% in the second quarter, while in North Orange County it dropped to 9.59%. Although the North/Central market area has the lowest average asking rents in the OC retail market, the average asking lease rate rose 14 cents in the second quarter to $1.53 per square foot per month, due largely to an increase of asking rents in the North County area.
