Real Estate Watch: Manufacturing & Warehouse
Manufacturing, Warehouse Rebounds
Activity in the manufacturing and warehouse sector picked up in the second quarter, particularly among spaces larger than 50,000 square feet.
The second quarter saw manufacturing and warehouse sales and leasing increase 43%.
In the past year and a half, manufacturing and warehouse activity has been driven almost entirely by smaller deals as larger tenants downsized or disappeared in the wake of the eroding economic conditions.
Despite a rise in activity, countywide vacancy rates continued to climb and finished the quarter at 4.5%. The largest increases in vacancies were seen in the North and West Orange County markets, where their combined vacancy rose 4.3%.
In comparison, the airport area saw a decrease in vacancy from 4.4% to 4.1%. South Orange County was the only market to show consecutive quarters of decreasing activity and finished off the quarter at 6.4% vacant.
Average asking lease rates for manufacturing and warehouse space have remained level through the first half of the year for the entire county. But the individual markets showed more dynamic behavior.
The influx of new construction in North County caused a net increase in asking rates of $0.01 per square foot. South County asking rates dropped $0.10 this quarter to $0.56 per square foot. Overall, the fluctuations of the various asking rates averaged out and the countywide average asking lease rate finished steady with last quarter at $0.53 per square foot.
Construction of manufacturing and warehouse buildings slowed considerably in the past few years with the weak economy. North County, where more than 400,000 square feet of space has been built since the first half of the year, is the only area that has completed any manufacturing and warehouse construction since 2002.
There are 18 manufacturing and warehouse buildings going up throughout the county. The larger products include the Voit Brea Business Park in Brea, the Ewing Industrial Center in Santa Ana, Pacific Gateway in Anaheim and CommerceCentre@Buena Park.
Data and Analysis provided by CB Richard Ellis’ Information Management Department.
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