The vacancy rate in Orange County’s manufacturing and warehouse sector dropped from 1.9% to 1.8% in the third quarter. It has dropped 18.2% year-over-year.
The market consists of 5,707 buildings totaling about 211 million square feet, and it is the largest segment of the county’s industrial market.
West and South Orange County ended the quarter with vacancy rates of 2% and 1.4%, respectively. The Greater Airport Area ended with 1.3%, and the North Orange County submarket ended at 2.1%.
Rents
Low vacancy rates continued to put more pressure on rents and push them up, as has been the case over the past several years.
Rents in the manufacturing and warehouse market rose year-over-year from 62 cents per square foot to 68 cents per square foot.
The South Orange County submarket had the highest asking rent at 85 cents per square foot, up 7.9% from the second quarter and 21.4% from a year earlier. The airport area was the second-highest at 71 cents per square foot, an increase of 2.9% year-over-year. High tenant demand and the lack of available space have moved landlords to continue to raise rents, and they’ll continue to do so while the market is in their favor.
The market, with roughly 2.5 million square feet of gross activity, generated 325,423 square feet of positive net absorption, bringing the year-to-date total to 2.2 million square feet.
The Greater Airport Area submarket contributed the most absorption, ending the quarter with 206,711 square feet, followed by South Orange County, with 69,006 square feet.
North and West Orange County generated 10,757 square feet and 38,949 square feet of positive net absorption, respectively.
Construction
Industrial development is starting to gain more traction, with more than 1 million square feet of active development.
Construction continued on the Anaheim Concourse’s third phase, and two buildings totaling 38,482 square feet broke ground in Fountain Valley. Construction finished on two buildings in Huntington Beach totaling 144,754 square feet.
Data and analysis provided by CBRE Research
