Despite the fact that the Orange County office market has entered the maturation phase of the real estate cycle, construction on projects planned during the previous years of high activity continued through the third quarter. Approximately 600,181 square feet of first-generation office space was added to the market in the third quarter, 22.3% of it pre-leased. Four new low-rise projects totaling 785,000 square feet broke ground and redevelopment of the Newport Technology Center buildings began in the third quarter, on top of the 2.4 million square feet already under way in the market. The new development in the office market includes Phase II of the Fairway Center in Brea, a two-building campus in Cypress, Phase II of Alton Corporate Center in the Irvine Business Complex submarket, and the Arbours Office Campus in Rancho Santa Margarita.
In the third quarter, 13 industrial properties broke ground, adding 720,225 square feet to the base. Just more than half of the new construction is R & D; space, including a 270,000 square-foot facility in Anaheim, a 64,904 square-foot property in Cypress, and three buildings at the Bunsen Corporate Center in the Irvine Spectrum. Groundbreakings in the manufacturing sector during the third quarter included two buildings at the Burke Santa Ana Business Center in the Airport Area, two buildings at Commercenter in Anaheim, and one 28,957 square-foot building in San Clemente. In addition, three warehouse properties totaling more than 216,000 square feet broke ground at the Fullerton Moore Business Park in North Orange County. Meanwhile, construction wrapped up in the third quarter on 20 properties totaling 809,179 square feet, 34% of which was occupied upon completion.
Although no new retail centers completed construction during the third quarter, four centers broke ground, boosting construction activity up to a total of 3.7million square feet. North Orange County construction activity increased with the start of two large centers in La Habra totaling more than 1.1 million square feet. Ameridge Marketplace, a power center, will house anchors such as Target, Linens ‘N Things, Albertson’s and Ross; and La Habra Westridge is a 695,000 square-foot community center with anchors such as Lowe’s, Sam’s Club, Wal-Mart and Kohl’s lined up. In addition, construction on Newport Ridge, a neighborhood center anchored by Vons Pavillions broke ground in Central Coast as well as one community center at Beach and Warner in Huntington Beach, which will house another new Lowe’s.
Analysis provided by CB Richard Ellis’ Global Research and Consulting.
