Real Estate Watch: West Orange County
West County Is Sluggish, But Small-Building Sales Are Hot
By SCOTT SMITH
The latest statistics on West Orange County, which began to feel the recession in 2001, shows that it continues to be stuck in the slowdown.
Bucking this trend is the thriving small-building-for-sale segment of the market. Prices for buildings sold in the 5,000-square-foot to 30,000-square-foot range are setting record levels per square foot.
At the same time, overall availability rates in West County have increased to 8.3% from 5.9% in the past 12 months.
The projected lease-up times for buildings in the 40,000-square-foot to 60,000-square-foot range (most of which are for lease only) are 2.5 times what they were 12 months ago. This isn’t due to large numbers of buildings coming available on the market, but rather to a slowly accumulating inventory, as businesses put off expansion moves for now.
The good news is that the leasing activity, especially for buildings larger than 30,000 square feet, has started to increase in the last 60 days in OC.
Quiksilver Inc., for instance, leased 101,618 square feet on Argosy Drive in Huntington Beach, a 74,107-square-foot building built on spec at 14600 Hoover Street in Westminster went into escrow and the Orange County Register leased 36,350 square feet on Monarch Street in Garden Grove.
Small buildings for sale are a strong market here.
Burke Development pre-sold its 2.85-acre project on Gothard Street in Huntington Beach. Asking prices started at about $120 per square foot and moved up to $135 per square foot before the buildings were completed.
The buildings average about 5,000 square feet. More similar projects are planned, both in West OC and across the county.
We anticipate a substantial amount of absorption between now and Thanksgiving. A strong wrap-up to the year could signal the beginning of a turnaround.
Smith is a first vice president in the Anaheim office of CB Richard Ellis.
