The Office Market
The Greater Airport Area contains nearly half of the 80 million square-foot office base in Orange County. One building in the Greater Airport Area market was completed in the beginning of the year, adding 94,053 square feet to the base. The building was entered into the competitive market just over half leased. The vacancy rate for office space in the Airport Area market edged slightly upward in the first quarter, due to the addition of the new space to the market, and low positive quarterly absorption of 76,522 square feet. Average asking lease rates in the Greater Airport Area are the highest of any market within Orange County. The current average asking lease rate is $2.33, 12% higher than the overall market average.
The Industrial Market
The Airport Area industrial market consists of 1,978 buildings totaling 69 million square feet. Approximately 77% of the Airport Area market is made up of manufacturing and warehouse (M & W;) construction. In the first quarter of 2000, the total industrial availability rate in the Airport Area rose to 5.15%, up from 5.02% the previous quarter, primarily due to negative net absorption experienced in the research and development (R & D;) sector. The availability rate for M & W; space in the Airport Area dropped to 4.45%, down from 4.59% the previous quarter. Although overall availability rates are up for the quarter, they are down 35% from the 8.42% availability at the beginning of 1999. Current construction activity in the Airport Area industrial market includes 253,760 square feet of R & D; space and 110,631 square feet of M & W; space. This activity accounts for 23% of the total construction activity in the Orange County industrial market.
The Retail Market
The Central Coast market accounts for approximately 15% of the county’s gross leasable area, and is the most dense retail market area with 34.6 square feet of retail space per capita. The Central Coast market boasts the greatest asking rents within the Orange County market. The current average asking lease rate for retail space in Central Coast is $1.99, 28% higher than the overall county average of $1.55. Central Coast experienced the greatest amount of net absorption over any other Orange County market area in the first quarter of 2000. The positive absorption of 178,474 square feet dropped the vacancy rate for the area below 8%. The Central Coast vacancy rate dropped to 7.85% in the first quarter, down from 8.27% in the fourth quarter of 1999.
