There was more than 1.5 million square feet of office space absorbed in the greater John Wayne Airport area last year.
In all, about 43 million square feet make up the airport area office market, with 340,359 square feet in the construction phase.
The positive absorption of office space resulted in an 11.1% decline in the vacancy rate, versus a year earlier. The amount of vacant office space in the airport area has decreased 19% since the fourth quarter of 2003.
It looks like the rent spike that’s been projected for Orange County’s overall office market has hit the airport area.
Lease rates in the region rose 6 cents per square foot in the fourth quarter, and are up 10 cents per square foot, versus a year earlier.
Meanwhile, the Central Coast retail market also is seeing the effects of high demand.
In the past year, average asking lease rates have climbed a dramatic 28 cents per square foot to $2.32 per square foot at the end of 2004.
Lease rates have been driven higher by a 40% decline in available vacant space. Vacancy stands at 4.8% in the area.
Although not as robust as the office and retail markets, the airport area’s industrial market is strong.
The industrial market, which is made up of 70.4 million square feet of manufacturing/warehouse and research and development space, produced 249,970 square feet of positive net absorption in the fourth quarter.
For the year, the manufacturing/
warehouse sector accounted for 722,476 square feet, or 66%, of the total absorption.
In comparison, the R & D; sector produced 373,588 square feet of positive net absorption last year but has a lower vacancy rate of 4.3%.
Overall, all property types in the airport/Central Coast area remain strong and stable.
There is positive absorption across the board and vacancy levels continue to decline.
The market definitely has shifted to a more landlord-friendly environment with lease rates anticipated to rise more in 2005.
Analysis provided by CB Richard Ellis Group Inc.’s Information Management Department.
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