Approximately 51 million square feet of the Orange County industrial base is research and development space. The largest portion of existing R & D; space (45%) is in the Airport Area, which also is the scene of most of the new R & D; construction activity under way in OC (569,420 square feet). The next busiest submarket for construction is South OC, with 357,842 square feet under way. These two areas account for the lion’s share of the 1 million square feet of R & D; under construction in OC.
Two buildings were completed during the fourth quarter in the Airport Area totaling 125,572 square feet, and another two sites were completed in South Orange County for 64,194 square feet. More than 160,000 square feet of construction broke ground in these two areas during the fourth quarter. Five buildings totaling 81,678 square feet were also completed in North Orange County; however, no new construction broke ground in that area this last quarter.
Activity
More than 875,000 square feet of R & D; space were leased or sold during the fourth quarter. The total R & D; activity experienced for the year totaled more than 4 million square feet, approximately 20% of the total activity for the industrial market in 1999.
Availability
The activity in the market during the fourth quarter pushed the availability rate for R & D; space down to 10.53%, from 11.65% in the third quarter. Actual vacancy for R & D; space also declined slightly in the fourth quarter, to 6.18% from 6.71% in the third quarter.
Lease Rates
For the fourth quarter, the average asking lease rate increased only 1 cent, to 88 cents per square foot, from the third quarter. But the lease rates have risen 10% from 80 cents per square foot in the fourth quarter of 1998. In the fourth quarter of 1999, the average asking sale price for R & D; space dropped slightly to $107.65 per square foot, from $108 per square foot in the third quarter. However, this sale price remains 3% higher than the year-end 1998 price of $104.77 per square foot.
