With more than 1,000 buildings totaling more than 42 million square feet of space, Orange County’s research and development sector accounts for 17% of the region’s industrial space.
The R & D; sector saw a steady 2006, slowing slightly in the fourth quarter.
In the fourth quarter, the R & D; sector saw 534,738 square feet of gross absorption. Keeping its pace from the prior quarter, vacancy and availability rates remained relatively stable.
As it stands, there is about 1.2 million square feet of vacant R & D; space. This yields to a low vacancy rate of 2.8%.
The rate remains unchanged from the prior quarter but represents a 30% decline from a year earlier.
The sector’s availability rate stood at 5.8%, rising slightly from 5.6% in the third quarter but dropped 25% from a year earlier.
For the year, there has been more than 540,000 square feet of positive net absorption.
The fourth quarter did see a minimal 20,721 square feet of negative net absorption, which mainly was concentrated in the south Orange County submarket.
The average asking monthly lease rate was 95 cents. While dipping 3 cents from the third quarter, the rate is up 13% from a year earlier.
The growth of new R & D; space is slow when compared to the manufacturing and warehouse market.
Currently, there are eight R & D; buildings totaling 220,238 square feet under construction.
Furthermore, an increasing number of developers are building as well as converting traditional industrial into R & D; condos for sale.
Data and analysis provided by CB Richard Ellis Global Research and Consulting.
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