By ROSS BOURNE
The John Wayne Airport area industrial market felt the effects of a slow economy in the fourth quarter but also showed some signs of resilience.
Making up more than 77% of the airport area’s industrial space, manufacturing and warehouse buildings cover 53 million square feet of space.
In the fourth quarter, manufacturing and warehouse space saw 625,690 square feet of gross activity, an increase from 503,391 square feet in the third quarter and 389,933 square feet a year earlier. A large portion of the absorption came from a two-building deal in Tustin.
Apparel company La Jolla Group Inc. leased a 147,136-square-foot building at 14350 Myford Road and a 50,318-square-foot building at 14370 Myford Road.
Overall, absorption for the fourth quarter was 24,297 square feet, bringing 2008’s total to negative absorption of 318,304 square feet.
With about 2.2 million square feet of vacant manufacturing and warehouse space available in the airport area, the overall vacancy rate in the fourth quarter stood at 4.1%, unchanged from the third quarter and up from 3.5% a year earlier.
The unchanged quarterly rate can be attributed to a lack of buildings coming available as a result of a significant number of tenants deciding to renew leases. The average asking monthly lease rate for manufacturing and warehouse space decreased in the fourth quarter to 75 cents triple net, down from 79 cents in the third quarter and 78 cents a year earlier.
Construction of manufacturing and warehouse space was nonexistent in the fourth quarter, a trend that has continued in the airport area and across Orange County’s industrial market.
The airport area, like other submarkets, will continue to see slower absorption levels as well as higher vacancy rates into the first part of 2009.
Bourne is a senior associate in the Newport Beach office of CB Richard Ellis Group Inc.
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