The Orange County high-rise office market had 44,450 square feet of net absorption in the fourth quarter for a total of 657,579 square feet last year.
The continued absorption has led landlords to firm up rents, with the average asking lease rate rising 8 cents to $2.35 per square foot, versus a year earlier.
Vacancy Down
Vacancy fell to 10.1% in the fourth quarter, a 21% decline compared to a year earlier.
Although the overall vacancy rate has decreased considerably in the past 12 months, the rates among OC’s five high-rise markets differ.
The north, central and airport markets saw an average decrease of 28% while the west and south markets increased 26% and 23%, respectively.
Most activity has taken place in the John Wayne Airport area,the largest high-rise market in the county.
The airport area produced 678,697 square feet of positive net absorption last year.
Solid demand in the airport area has produced the highest lease rates in OC, with an average asking rent of $2.52 per square foot in the region.
Tenants with leases that expire in the next 12 to 18 months are beginning to take advantage of the rental rates now rather than later.
Fewer Options
As the market continues to tighten, companies are finding fewer options to meet their expansion needs.
Lease rates are expected to rise in
2005 while vacancy rates continue to decline.
Analysis provided by CB Richard Ellis Group Inc.’s information management department.
The Real Estate Watch Chart – Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
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