The vacancy rate in Orange County’s manufacturing and warehouse market dropped from 1.8% to 1.7% in the first quarter from the fourth quarter. Year-over-year, the vacancy has dropped 22.7% in the sector.
Manufacturing and warehouse is the largest segment of the industrial market, consisting of 5,717 buildings totaling over 212 million square feet.
The Greater Airport Area and West and South Orange County all ended the quarter with a vacancy rate of 1.5%, while North Orange County ended with a 1.9% rate. Low vacancy rates continue to put more pressure on rents, pushing them upward, as has been the case over the past several years.
The manufacturing and warehouse market saw a 10-cent increase in rents year-over-year from 63 cents per square foot to 73 cents per square foot.
The South Orange County submarket recorded the highest asking rent at 87 cents per square foot—up 16% since last year—and the Airport Area remained close behind at 74 cents per square foot, an increase of 7.3% over last year.
The high level of tenant demand coupled with the lack of available product has continued to move landlords to push rents higher and will continue to do so while the market is in their favor.
The manufacturing and warehouse sector, with over 3.2 million square feet of gross activity, generated 872,179 square feet of positive net absorption during the quarter.
The North Orange County submarket contributed the biggest amount of absorption, ending the quarter with 746,996 square feet, followed by West Orange County with 105,315 square feet. South Orange County generated 30,560 square feet of positive net absorption, and the Greater Airport Area ended the quarter with negative net absorption of 10,692 square feet.
Orange County currently has 231,068 square feet under construction, the majority of it concentrated in North Orange County, totaling over 218,968 square feet.
Data and analysis provided by CBRE Research
