There were 502,612 square feet of industrial space under construction at the end of the fourth quarter. Three buildings totaling 357,858 square feet are under construction in Brea, and the remainder of the construction—totaling 144,754 square feet—is in Huntington Beach.
The lack of available land and the competition from residential developers is a constant struggle in the Orange County industrial market. But the need for new, quality space is important as demand increases.
Supply
The OC industrial market delivered 958,241 square feet of new supply last year, surpassing the 501,780 square feet in 2013. Preleases and the lack of substantial construction in the pipeline have undermined efforts to add adequate supply for tenants desiring quality space.
CBRE Econometric Advisors predicts that absorption will continue to outpace completions well into this year, even as several developments are scheduled to be completed this year.
Office Market
Most economic and industry indicators point north, though new construction activity in the office sector continued to be relatively quiet.
There are only two office properties currently in development besides Irvine Company’s 200 Spectrum Center, bringing the Orange County construction total to 496,355 square feet.
The 425,000-square-foot class A office building at 200 Spectrum Center, praised for its modern design and efficient floor plates, broke ground in the fourth quarter and is on pace to be completed by the first quarter of next year.
Four buildings were delivered last year that totaled nearly 1.3 million square feet. Three of the four buildings were build-to-suits. The fourth was 520 Newport Center Drive, owned by Irvine Co. and totaling 326,065 square feet. It was the only speculative office building delivered to the market last year.
Many of the largest institutional owners have proposed 100,000-square-foot to 300,000-square-foot office properties, but none are due to be delivered before mid-2017. A few development projects are in the pipeline and can be delivered by mid-2017 following lease execution.
Research and analysis provided by CBRE Research
