The Mid-Counties Market is defined as the cities straddling the border of Orange and Los Angeles counties. The strength of the Mid-Counties market continued through the fourth quarter, as the market indicators remained positive in both the office and industrial segments.
The Office Market
The Mid-Counties office market is made up of 65 buildings totaling 5.5 million square feet. This petite market had its strongest annual absorption (12%) in three years, forcing the vacancy rate down 35% to 12.0% from 18.6% last year. Fourth-quarter activity consisted of multiple small deals and minor consolidations that brought the quarterly net absorption to a negative 2,426 square feet. However, annual net absorption remained impressive at 389,877 square feet. Mid-year and year-end bumps pushed the average asking lease rate up 9% (15 cents) from the year-end 1999 figure. The 3% increase during the final quarter raised the average to $1.78 per square foot per month, the highest rate in Mid-Counties history. Construction continued on 431,606 square feet in Cerritos and Cypress. Development of the Warland Cypress Business Center, a low-rise campus-style project, was anticipated to wrap up toward the end of the first quarter. Completion of Phase II of the Cerritos Corporate Center is estimated for the second quarter, and the eight-story Cerritos Towne Center is expected to open in the third quarter.
The Industrial Market
Last year was an active one for the industrial market, resulting in a year-end vacancy rate of less than 3% due to 2.7 million square feet of annual net absorption. The vacancy rate dropped 18% in the final quarter, down to 2.8%. Nearly half of the gross activity for the fourth quarter occurred in Santa Fe Springs, where approximately 925,822 square feet were leased or sold. Santa Fe Springs also accounted for nearly 80% of the construction activity in the Mid-Counties industrial market at the end of the year. Combined with activity in Buena Park, Cerritos, Norwalk and Paramount, the Mid-Counties Industrial market had a total of 1,468,309 square feet under construction as 2000 came to a close.
Analysis provided by CB Richard Ellis’ Global Research and Consulting.
