The airport/Central Coast area is composed of 2,735 office, retail and industrial buildings totaling more than 127 million square feet. Vacancy levels remain in the single digits for all property types, with the exception of office, which stands just over 10%.
Industrial vacancy was 3.3%,a combination of the research-and-development sector’s rate of 2.5% and the manufacturing and warehouse rate of 3.6%. Vacancy rates for the area’s retail space held steady at 2.9%.
Continued tight vacancy levels have pushed rental rates upward across the board, even in the office market where vacancy has increased. The average asking lease rate for office space in the greater airport area has climbed 45 cents during the past year to $2.93 per square foot, while research and development space has grown 37% to $1.16 per square foot. Manufacturing and warehouse properties have seen a 20% year-over-year increase to 79 cents per square foot.
Retail space, however, did experience a decline with an average asking rent of $2.50 per square foot.
The majority of construction is concentrated in the office market, which now has a little more than 2 million square feet in the development phase. One of the significant office properties that was completed in the second quarter is a LEED,the Leadership in Energy and Environmental Design,building at 2211 Michelson. This 13-story, class A building totals 266,603 square feet and is approximately 30% leased with tenants such as Pathway Capital Management LLC, Wachovia Corp. and Bixby Land Co.
With 117,000 square feet still under construction, the retail market also had a delivery this quarter with the 302,000-square-foot South Coast Home Furnishings Centre in Costa Mesa.
Construction of industrial space remained low with only one research and development building totaling 52,984 square feet under way.
Analysis by CB Richard Ellis Group Inc.’s Global Research and consulting.
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