The Manufacturing and Warehouse sector of the OC industrial market consists of 5,392 buildings 10,000 square feet or larger, totaling more than 197 million square feet. More than 40% of this space is concentrated in North OC, and more than 25% in the Airport Area.
Activity and Absorption
Throughout 1999, a total of more than 16 million square feet of M & W; space was leased or sold in the OC industrial market, an increase of 2.7 million square feet over 1998’s total. Approximately one-fourth of the year’s activity (4 million square feet) occurred during the fourth quarter.
In the quarter, 1.2 million square feet of M & W; space were absorbed, slightly less than the absorption experienced in the third quarter. The majority of the positive quarterly absorption (70%) occurred in the Airport Area.
Availability and Vacancy
The strong demand for industrial space in the fourth quarter continued to push the M & W; availability rate to 5.91%, down from 6.61% in the third quarter. At the end of 1998, the M & W; availability rate was 6.67%. Year-end vacancies in M & W; space dropped slightly to 2.71% from the already-low rate of 2.73% in the third quarter.
Construction
Despite the diminishing supply of buildable, entitled land, the demand for industrial space continued to drive construction in 1999.
At the end of the fourth quarter, almost 2.4 million square feet of industrial construction was under way in the OC market, 58% (1.4 million square feet) of which is M & W; space.
Lease Rates
Although the M & W; average asking lease rate fluctuated by a penny throughout the year, it ended back at 59 cents per square foot in the fourth quarter, the same as at the end of 1998. The average asking sale price per square foot for M & W; space rose 4% to $78.82 per square foot from $75.71 per square foot in the fourth quarter of 1998.
