COMMERCIAL
Orange County’s industrial market still counts a remarkably low vacancy rate of less than 4%, according to most local brokerages’ data, portraying a strong market.
But the latest quarterly data raised a few points of concern.
Vacancy for OC’s industrial buildings inched up from 2.8% to 3.1% last quarter, according to data from Los Angeles-based CB Rich-ard Ellis Group Inc.
The availability rate,which measures space that is available or is soon to be,for the county’s 247 million square feet of industrial space now stands at 6.8%.
Asking monthly lease rates fell 2 cents in the last quarter, to 76 cents. Also, the last quarter saw 690,425 square feet of total negative absorption, with the largest drop coming from North County.
The increase in negative net absorption can be explained by tenants who are opting to sign short-term lease renewals instead of relocating, in their effort to wait out the current economic uncertainty, according to officials with CB Richard Ellis.
The average asking sale prices for an industrial property also declined about 1% from the first quarter, and now stands at about $170 per square foot. Manufacturing and warehouse space is being marketed at nearly $162 per square foot, while research and development properties stand closer to $213 per square foot.
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Renaissance ClubSport in Aliso Viejo: opened its doors in Parker Properties’ Summit office campus |
ClubSport Opens
The Renaissance ClubSport in Aliso Viejo, the last big project to finish up construction during Aliso Viejo-based Parker Properties’ latest round of development at its Summit Office Campus, has opened its doors.
The project includes a 174-room hotel and sports club that guests can use. The hotel has a 75,000-square-foot fitness facility, a spa, 5,500 square feet of meeting space and other amenities. It’s the second Renaissance ClubSport in the country.
Irvine-based R.D. Olson Development built ClubSport. Rooms start at about $250 per night and can run more than $400 per night for suites, according to the company’s Web site.
Seal Beach Sale
A small shopping center in Seal Beach has traded hands for $657 per square foot, one of the highest-priced deals for an OC retail property seen this year.
The Pacific Gateway Shopping Center, a 19,474-square-foot property on Seal Beach Boulevard, sold for $12.8 million, with a 6.59% capitalization rate. The center includes tenants Charles Schwab, Subway, Countrywide, Starbucks and Anytime Fitness.
The buyer was a private, foreign investor seeking to increase his holdings in the U.S. and to take advantage of the weak dollar, according to officials with the Newport Beach office of CB Richard Ellis, which represented the seller, Sacramento-based Panattoni Development Co.
The sale took place in less than two months from start to finish, and the buyer paid in all cash. The price-per-square foot is about $200 more than the average OC shopping center; the highest known sale of a similar property was seen in 2006, when a 47,000-square-foot center in Aliso Viejo went for nearly $830 per square foot.
OC’s retail sector counted a vacancy rate of 4.2% at the end of the second quarter. There was 210,736 square feet of positive absorption recorded during the quarter. The average monthly asking lease rate jumped 6 cents last quarter, to $2.71 per square foot.
CB Richard Ellis’ Phil Voorhees, Megan Wood, Patrick Toomey and Barclay Harty represented Panattoni in the sale.
Two more housing projects planned for the commercial area around John Wayne Airport in Irvine, totaling nearly 900 apartments, hotel rooms and condominiums, have been scrapped, according to city records.
RESIDENTIAL
2500 Main, a 457-apartment development considered at the intersection of Main Street and Cartwright Road, has been pulled from the pipeline, according to documents filed with the city of Irvine this month. The 7-acre project was still being reviewed by the city as of May.
Also on the chopping block: 2500 Michelson, a combination condo and hotel plan once envisioned across the street from Miami-based Lennar Corp.’s Central Park West development (and next door to the Business Journal’s office).
The 4-acre Michelson development had been conceived as a combination of 208 condos and 220 hotel rooms in a high-rise tower.
All told, about 2,700 condos, apartments, and hotel rooms planned for development in the Irvine Business Complex have been scrapped over the past two years as the residential market has slowed. Another 3,534 units in the business complex have been approved or are currently under construction, while plans for an additional 2,763 units are still under review.
