The Office Market
The North and Central Orange County markets combined make up nearly 28% of the total net rentable office square footage in Orange County. Net absorption in the northern portion of the county increased slightly in the third quarter to 56,173 square feet, bringing the year-to-date total to 418,001 square feet. The absorption in this market was hindered due to one major movement in the Central County market where a company vacated approximately 67,000 square feet of space to move into a built-to-suit facility. Although the vacancy rate for the northern market decreased from 11% in the second quarter, it remained above the 10% threshold at 10.8% in the third quarter. Construction activity in the North and Central County markets increased to 352,471 square feet with the ground-breaking of Stadium Gateway in Anaheim, which will add 262,000 square feet to the market upon completion.
The Industrial Market
North Orange County is the largest industrial market with more than 105 million square feet, 91% of which is manufacturing and warehouse-type construction. The M & W; market in North Orange County remained very tight through the third quarter of 2000 as the vacancy rate dropped to just 1%, due to 518,511 square feet of positive net absorption. To date, nearly 1.4 million square feet of M & W; space has been absorbed in 2000 in the North Orange County market. The R & D; market in North County struggled a bit during the third quarter with 82,978 square feet of negative absorption that pushed the vacancy rate to 3.9%, up from 2.0% the previous quarter. Construction activity continues in the M & W; market with 910,286 square feet underway, however, there is no R & D; development in North Orange County at this time.
The Retail Market
The North and Central Orange County markets make up half of the gross leasable area of the retail market with more than 36 million square feet of space. The vacancy rate in the North/Central market decreased slightly during the third quarter to 8.4% due to positive absorption concentrated in the Central Orange County market. The average asking lease rate for retail shop space in this market dropped one cent to $1.52 in the third quarter, but stands $0.11 (8%) higher than the $1.41 rate in the third quarter of last year. Retail construction activity as of the third quarter consists of 2 power centers, one in North and one in Central Orange County, which will add a total of 575,000 square feet to the base upon completion.
