Real Estate Watch: Airport/Central Coast
Airport Area Picks Up With Economy
The commercial real estate market in the John Wayne Airport and Central Coast area of Orange County responded to an improving economy in the second quarter.
The area posted more than 700,000 square feet of positive absorption in the office, industrial and retail markets.
The bulk of demand took place in the office and manufacturing and warehouse sectors, where 660,182 and 163,341 square feet were absorbed, respectively. When compared to the sluggish performance of the first quarter, the activity seen in the second quarter provides an optimistic outlook.
The sizeable increase in office activity led to a big drop in the vacancy rate to 16.8%, down 8.2% from last quarter.
This activity may have been spurred by a decline in average asking lease rates in the quarter to $2.08 per square foot, the lowest level since 1997.
The market for manufacturing and warehouse space in the airport area took a positive turn in the second quarter, with 163,341 square feet of net absorption.
On the flip side, the research and development sector saw more than 125,000 square feet of negative absorption. Curiously, average asking lease rates are up this quarter versus the first quarter and a year ago. The average asking price per square foot in the second quarter was 90 cents for R & D; space and 65 cents for manufacturing and warehouse space.
The Central Coast saw positive retail activity, with 39,717 square feet of positive net absorption. Most activity took place in neighborhood and community center malls.
Nearly 26,000 square feet of activity was in The Bluffs, the recently completed neighborhood center in Newport Beach, which was designed to host restaurants and service businesses. By the end of the quarter, 56% of The Bluffs was leased.
Construction under way in the Central Coast includes one neighborhood and one community center, which will add 375,000 square feet to the retail base in Irvine when they are finished.
Data and analysis provided by CB Richard Ellis’ Information Management Department.
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