By STEWART NAVARRE
In the first quarter, commercial property under construction in Orange County totaled more than 2.5 million square feet,a decrease from the fourth quarter figure of 3.2 million square feet.
Construction was completed on 1.08 million square feet during the first quarter. Office space construction, at 700,000 square feet, has decreased from the fourth quarter’s total of 1.6 million square feet.
Office construction currently represents 26% of commercial construction,down from 49% in the fourth quarter. Construction was completed on six office projects totaling 889,000 square feet during the first quarter.
Construction of new retail remains relatively constant with ongoing construction of 1.5 million square feet,an increase from the fourth quarter’s 1.4 million square feet. Construction was completed on one retail project of 103,000 square feet during the first quarter.
Construction of new industrial buildings has increased to 355,000 square feet from the fourth quarter’s 286,000 square feet. Construction was completed on two industrial projects totaling 87,000 square feet during the first quarter.
Costs of basic materials continue to increase under steady pressure from rising fuel prices and strong development in the Chinese and Indian economies with attendant purchases of construction materials. An example: Based on a recent visit to Asia, one of our OC venture capitalists estimates that nearly 20% of the high-rise construction crane inventory worldwide is at work in Shanghai, China.
Current estimates indicate price increases in base materials: roofing at 8%, asphalt at 8%, concrete at 10% and vertical construction materials at 15%.
Navarre is managing director for CB Richard Ellis Group Inc.’s project management in Southern California in the Newport Beach office.
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