Tenant activity remained stagnant in the industrial market during the third quarter.
Tenants remained on the sidelines, hesitant to make decisions before the presidential election. The Greater Airport Area recorded 48,459 square feet of negative net absorption in the industrial segment during the quarter, with a base of 68.8 million total square feet.
M&W, R&D
The airport area’s manufacturing and warehouse sector was most affected by the negative net absorption, giving back 106,731 square feet during the third quarter, whereas its research and development sector rebounded from a tough second quarter and absorbed 58,272 square feet.
The negative absorption resulted in a slight increase in vacancy for the manufacturing and warehouse sector, which saw vacancy move to 3.6%.
Vacancy in the research and development market decreased due to positive absorption in that sector, from 5.5% in the second quarter to 5.2% in the third.
Combined Vacant Space
There is a total of 2.7 million square feet of vacant space in the Greater Airport Area, equating to a total vacancy rate of 4%. Irvine had the highest vacancy rate within the airport area at 5.1%, whereas Fountain Valley remained the healthiest market with a rate of 1.1%.
The average asking lease rate for manufacturing and warehouse buildings in the third quarter was 61 cents per square foot, up from 60 cents per square foot at the end of last year’s second quarter and 56 cents per square foot in the third quarter of 2011. That represented a continued trend of increasing rates in the sector.
Asking Rates
Average asking rents increased 8.9% during a 12-month span through September. The research and development market also saw positive results for the quarter as average asking lease rates jumped 14 cents per square foot to an average asking rate of 82 cents per square foot.
Analysis provided by CBRE Group Inc.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
