The Office Market
The West Orange County office market is composed of 36 properties totaling just more than 2.3 million square feet, about 4% of the total office market in Orange County. Due to its small size, the West Orange County market experiences greater fluctuations in vacancy and absorption than the other markets in the county, which are significantly larger. Vacancy rates in West Orange County have teetered up and down each quarter this year as space was vacated one quarter, and absorbed the next. However, the area experienced negative absorption in both the third and fourth quarters, bringing the total absorption for 1999 to a negative 85,279 square feet. Due to the negative absorption, the vacancy rate rose to 20% at the end of the year. The fourth-quarter average asking lease rate for office space decreased to $1.67 per square foot per month, a 2-cent drop from the third-quarter average. That rate, however, was 13 cents (8%) higher than the 1998 year-end average asking lease rate of $1.54.
The Industrial Market
The West Orange County industrial market is primarily made up of manufacturing and warehouse (M & W;) space. Research and development (R & D;) space accounts for only 15% of the market in West Orange County. Availability rates for R & D; space shot up to 11.54% in the fourth quarter, from 10.78% in the third quarter. However, due to the small size of the R & D; market in the area, the overall availability rate (M & W; and R & D; combined) was flat for the quarter at 7.56%, down a tick from 7.57% in the third quarter. The majority of the construction activity in West Orange County is M & W; space. Four M & W; buildings were under construction as of the fourth quarter, totaling approximately 150,000 square feet, and one 64,614 square-foot R & D; building remained under construction at year-end.
The Retail Market
West Orange County, which has 11% of the county’s total retail base, is the second-most dense retail market area in Orange County with 31.7 square feet of retail space per capita. Construction continued on one neighborhood center in West Orange County that will add 268,000 square feet to the retail base upon completion.
Vacancy rates in West Orange County have hovered in the 9%-to-11% range for the past three years. Continuing that trend, the vacancy rate dropped in the fourth quarter to 9.84%, from 10.39% in the third quarter. The average lease rate in the West Orange County market dropped 2 cents during the quarter, back down to $1.37, its second-quarter level.
