The Office Market
The Mid-Counties office market started off the New Year as a strong market with positive absorption and declining vacancy rates. Net absorption for office space in the first quarter reached 209,624 square feet of positive activity. The largest absorption numbers were posted in Norwalk and Cerritos.
The positive absorption experienced in the first quarter dropped the Mid-Counties office vacancy rate to 14.95%, down from 18.18% in the final quarter of 1999. The lowest vacancy rates for office space in Mid-Counties were seen in La Palma (3.35%) and Seal Beach (4.35%)in Orange County.
The average asking full-service-gross lease rate for office space in the Mid-Counties market dropped 1 cent to $1.62 per square foot in the first quarter. Average asking rents have hovered in the range of $1.60 to $1.63 over the past year. Seal Beach and La Palma, the cities with the lowest vacancy rates, also have the highest average asking lease rates at $2.25 and $1.93, respectively. Cerritos, Artesia, La Mirada and Cypress also have average asking lease rates well above the average of the Mid-Counties market.
The Industrial Market
Industrial availability dropped again in the first quarter in Mid-Counties to 5.32%, down from 5.51% in the fourth quarter. In the first quarter of 1999, the availability of industrial space in the Mid-Counties market was 7.39%. The declining vacancy in the beginning of this year was fueled by gross activity of approximately 6.8 million square feet in the first quarter.
The average asking lease rate for industrial space in the Mid-Counties industrial market has climbed over the past year due to the demand for space. As availability rates declined, average asking net lease rates for industrial space rose to 49 cents per square foot in the first quarter of this year, an increase of 2 cents from the fourth quarter of 1999. In the first quarter of 1999, the average asking rent stood at 40 cents.
