Vacancy in Orange County is at an all-time low. Sale prices and deal counts have pushed up to new peaks and surpass those of the last cycle in 2006 and 2007. Industrial sale prices grew 8.2% last year and transaction counts by 5%.
The Orange County industrial market remained tight, with strong market fundamentals, prompting investors and users to acquire the high-value industrial assets due to strong demand and perceived low risk. Sustained market confidence remained high as more investors opted to buy or hold onto industrial assets. Investor confidence in the market has been driven by a spike in third-party logistics and packaging demand in an effort to shore up city logistics challenges as the e-commerce evolution shifts to more light industrial needs.
Consumers’ gravitation to online shopping has resulted in e-retailers actively scouting locations for small warehouses to solve the last-mile problem. Nielsen research shows the best places for the facilities are close to densely populated areas with high concentrations of residents ages 20 to 45 with household incomes of more than $50,000. Orange County’s favorable demographics indicates area consumers are very likely to shop online now and in the future. The last-mile-driven diversification of the supply chain into small infill facilities should mean continued steady demand for light industrial properties here.
—Analysis provided by CBRE Research
