The manufacturing and warehouse (M & W;) sector of the Orange County industrial market consists of 5,423 buildings greater than or equal to 10,000 square feet in size, totaling over 198 million square feet. Nearly half of this space is concentrated in North Orange County, and more than 25% in the Airport Area.
The Orange County M & W; market has started on the right track to having another strong year of activity. In the first quarter of 2000, nearly 3.7 million square feet of M & W; space was leased or sold. This is comparable to the 3.7 million square feet of gross activity seen in the first quarter of last year. Approximately 46% of the sale and leasing activity for this quarter was experienced in the North Orange County area. The Orange County industrial market achieved a total of 1.1 million square feet of positive absorption in the first quarter, more than 77% (897,362 square feet) of which was manufacturing and warehouse space.
Demand in the industrial market has been pushing M & W; availability rates downward since the second quarter of 1999. The availability decline continued through the first quarter of 2000, when the rate dropped to 5.63%, down from 5.92% the previous quarter. A year ago, in the beginning of 1999, the availability rate for M & W; space was 6.21%. Current vacancy for M & W; space stands at a low of just 2.16%.
The beginning of the year brought about 15 industrial completions, totaling 1,034,774 square feet, the majority of which was manufacturing and warehouse product. Eighty-nine percent of the M & W; completions in the first quarter were located in North Orange County. Currently, there are 31 M & W; projects under construction, which will add 1,125,758 square feet to the market upon completion.
The average asking lease rate for M & W; space, which has been hovering just above or below $.60 per square foot for the past four quarters, dropped to $.57 in the first quarter of 2000. This is a 2 cent drop from the $.59 rate last quarter. The Greater Airport Area and South Orange County boast the highest asking prices in the county at $.72 and $.67, respectively.
