Commercial property under construction in Orange County totaled nearly 2.8 million square feet at the end of the first quarter.
New construction declined across all product types during the recession but has picked up with the recovery. The first-quarter figures indicate the momentum has continued, with the office and industrial segments leading the way.
Construction of speculative industrial product was in full swing, but speculative construction of office buildings has yet to begin. Construction in the office sector was all build-to-suit facilities. There was about 71% less space under development than at the end of 2006, but construction was up considerably from 12 months before, when it was virtually nonexistent.
There were four build-to-suit projects under construction in the office sector totaling nearly 1.1 million square feet. One of the projects will be the headquarters for Pacific Dental Services. The 139,386-square-foot Irvine building, previously an industrial facility, is being refurbished and is expected to be complete by the end of the second quarter.
Hyundai Motor America is building its 469,000-square-foot facility in Fountain Valley, while construction continues on Pacific Investment Management Co.’s 380,000-square-foot headquarters in Newport Beach. The Carpenters’ Union is building a new 107,000-square-foot facility in Buena Park.
Construction of retail space remains minimal, but one new center remains in the construction phase.
A nearly 481,000-square-foot regional center, The Source, broke ground at the end of last year in Buena Park.
Some development has occurred in the small-center and single-tenant arena of less than 50,000 square feet, but the Buena Park center is the first major one to be built since the fourth quarter of 2008.
Renovations and expansions designed to enhance and improve existing centers are still occurring. Other formerly active development projects remain on hold or have been frozen indefinitely. Pacific City, a specialty center in Huntington Beach, halted construction of the 191,000-square-foot center in early 2010, and full-blown construction hasn’t resumed.
The industrial sector had the most construction activity in the first quarter, increasing significantly from just a year ago. The first two phases of the Anaheim Concourse Distribution Center broke ground.
Build-to-suits in North Orange County for CVS and RPM Transportation broke ground. That brings the sector’s current under-construction activity to 1.2 million square feet, the largest amount of activity the market has had since the first quarter of 2006. The Anaheim Concourse’s third phase, planned at 807,530 square feet, is slated to break ground this year.
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