By BEN SEYBOLD
Orange County’s manufacturing and warehouse industrial sector comprises nearly 5,600 properties larger than 10,000 square feet and exceeds 205 million total square feet.
Activity slowed during the first quarter, and the manufacturing and warehouse market saw a small rise in vacancy to 2.8% from 2.7% the previous quarter.
But the availability rates increased from 5.4% to 6.1% in the first quarter. In spite of the increase in vacancy, OC’s manufacturing and warehouse vacancy remains one of the lowest in the nation. Industrial construction remained low with only 293,387 square feet in the development phase, and there was 164,241 square feet of negative absorption recorded in the quarter.
North Orange County has 48% of the county’s industrial space, or 98.6 million square feet, and is the largest submarket in the county. Vacancy rates moved up to 2.5% in the first quarter from 1.9% but were still below the OC average of 2.8%.
North Orange County availability rates also jumped from 4.1% to 5.3% compared to the fourth quarter. Average asking lease rates have risen 1 cent since the fourth quarter to 64 cents per square foot per month.
All of the buildings under construction,totaling 293,387 square feet in the county,are in North Orange County.
The John Wayne Airport area is the second largest submarket in OC, counting 53.9 million square feet. This submarket reflected the largest positive absorption in the county of more than 426,000 square feet in the first quarter.
Market fundamentals will be tested in the coming months in the manufacturing and warehouse sector primarily due to economic concerns and sluggish demand.
Seybold is a senior vice president in the Anaheim office of CB Richard Ellis Group Inc.
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