The Office Market
The West Orange County office market, which includes just 4% of the net rentable area of Orange County, tends to experience greater fluctuations in key market indicators due to its small size than the larger Orange County office markets. The average asking lease rate for office space in the third quarter increased to $1.69 per square foot, 9 cents higher than the second quarter and 14 cents higher than the third quarter of 1998. However, weighted by approximately 63,000 square feet of negative net absorption, the average vacancy rate in the West Orange County office market increased to 19.20% from 16.47% in the second quarter.
The Industrial Market
The West Orange County industrial market generated almost 654,000 square feet of sale and lease activity in the third quarter. The overall industrial availability rate increased slightly to 7.57% from 7.31% in the second quarter. Average asking lease rates in the third quarter for all industrial space (manufacturing and warehouse, and research and development), posted an annual increase of 2% to 55 cents per square foot, up 1 cent from 54 cents per square foot in the third quarter of 1998. Third-quarter average asking lease rates for R & D; space increased 9% in the past 12 months to 71 cents per square foot from 65 cents per square foot in third quarter of 1998. New construction picked up during the quarter as 280,729 square feet were under construction compared with 146,920 square feet under way at the end of the second quarter.
The Retail Market
West Orange County, with 12% of the county’s retail base, is second only to the Central Coast sub-market as the densest retail market area in Orange County, with 32.6 square feet of retail space per capita. Lease rates in the West Orange County market climbed another 2 cents during the quarter to $1.39 per square foot. West Orange County has one neighborhood center under construction that will add another 268,000 square feet to the base. For the quarter, the vacancy rate in West Orange County increased to 10.39%.
