At the end of the second quarter, commercial property under construction in Orange County totaled more than 1.3 million square feet. New construction is down significantly in comparison to last year at this time when buildings under construction totaled more than 5.3 million square feet.
The majority of the decline is in the office sector, which has only two buildings in construction totaling 80,000 square feet.
Development of retail centers also declined with 971,988 square feet, while construction of industrial buildings is minimal with 259,624 square feet in the works.
More than half of all new buildings are expected to be finished by the end of the year.
The construction of offices hit its peak in late 2006 when developers saw the record-low vacancy levels and high demand. Today, there is about 98% less space under development than there was at the end of 2006.
Following the delivery of 1.4 million square feet of office space year-to-date, there is 80,000 square feet still in the construction phase. Although there are many office projects in the planning phase, none are expected to break ground this year.
The retail sector, which has exhibited relatively stable vacancy levels, has four centers currently under construction. One of the most notable projects to complete construction this quarter was Anaheim GardenWalk. Located between Katella Avenue and Disney Way, the development contains 439,600 square fee of retail space and provides a variety of dining choices from Bubba Gump Shrimp Co. to Cheesecake Factory and McCormick & Schmick’s Grill.
Industrial development continues to remain low, mainly due to lack of available land, which is leading builders to redevelop existing structures. North Orange County carries the largest amount of new construction, concentrated in Fullerton. In the Valencia Business Center, 118,000 square feet of buildings larger than 10,000 square feet were completed this quarter.
The Kimberly Business Center, also in Fullerton, has nine buildings totaling 200,000 square feet under construction, which are due to be finished at the end of 2008.
Data and analysis provided by CB Richard Ellis Group Inc.
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