Real Estate Watch: Construction
Construction Activity Slows in Q3
Industrial
Construction activity in the Orange County industrial market has slowed considerably from the consistent pace seen in the past several years.
In the third quarter, manufacturing and warehouse space being developed increased to 781,198 square feet. During the quarter, the remaining 10 buildings of the Voit Brea Business Park broke ground and will add 386,412 square feet when finished.
Construction on three manufacturing buildings wrapped up in the third quarter: two in Anaheim and one in Fountain Valley, for a total of 91,735 square feet.
No new research and development construction began in the third quarter. One R & D; building was finished at the Irvine Spectrum, and activity in the sector fell to 63,222 square feet.
Office
Two class-A office projects were completed during the third quarter, adding 454,497 square feet to the OC base.
One property, the 14-story second phase of Opus Center Irvine, was 45% leased at completion, while a six-story, 148,000-square-foot Park Place building entered the market 100% vacant.
One project broke ground during the third quarter, the 62,258-square-foot second phase of the Arbours Office Campus in Rancho Santa Margarita.
Construction in the sector totaled only 1.2 million square feet at the end of the quarter, 35% less than at the same time last year.
Retail
OC retail construction continued at a fairly steady pace, with North County, South County and Newport Coast representing the highest-growth areas.
Construction on Newport Ridge, a neighborhood center anchored by Pavilions, was finished in the third quarter and added 103,000 square feet to the existing retail base in the Central Coast market.
Remaining construction activity in Central Coast includes a 225,000-square-foot community center and two specialty centers totaling 305,000 square feet. That activity includes the third phase of the Irvine Spectrum Entertainment Center, which opened days after the close of the third quarter.
South County continues to lead retail construction activity with 1.3 million square feet under way. Activity includes two specialty centers and one community center. North County follows closely with 1.1 million square feet under development, including a 695,000-square-foot community center and a power center.
Analysis provided by CB Richard Ellis’ Global Research and Consulting.
