The Mid-Counties office and industrial markets posted solid results in the third quarter.
The office vacancy rate was 12.1%, down 24% versus a year earlier. Although unchanged at 4% from the previous quarter, the industrial market’s vacancy rate was down slightly from a year earlier.
The industrial market produced a healthy 955,266 square feet of positive net absorption in the third quarter, resulting in 2.6 million square feet of positive net absorption for the first nine months of the year.
Absorption is up sharply from the 359,638 square feet negative absorption during third quarter 2003.
The Mid-Counties office market posted positive net absorption of 79,052 square feet in the period, and 186,845 square feet for the first nine months of the year.
Average asking office lease rates rose two cents to $1.88 per square foot in the third quarter. Due to declining vacant space in the Mid-Counties region, office rents have increased 4.4% in the past 12 months.
Despite this dramatic rise in office rents, average asking industrial lease rates have been relatively flat at 53 cents per square foot. In the past year, industrial lease rates have increased just one penny, or 1.9%.
Continued gains in the local and national economic picture, and the revival of job growth in Southern California, should allow the Mid-Counties industrial and office real estate market to continue its steady momentum forward in 2005.
The Mid-Counties includes 70 office projects totaling more than 5.9 million square feet and 2,525 industrial buildings totaling 131 million square feet.
Data and analysis provided by CB Richard Ellis Group Inc.’s Global Research and Consulting.
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