The vacancy rate in the manufacturing and warehouse sector in Orange County finished the second quarter at 3%.
That’s up from 2.7% from last quarter, but remains very low by historical standards.
If you are downsizing, expanding, looking to own a building or just want to make a move, the low vacancy rates make it difficult to find a quality, functional manufacturing and warehouse building in Orange County.
Increase in Pricing
The shortage of inventory comes with an increase in pricing. All four submarkets—North, South, West and the Airport Area—experienced an increase in their respective asking lease rates.
The largest increase occurred in West Orange County, where the average asking lease rate jumped from 52 cents per square foot to 55 cents per square foot, representing a 5.5% increase from the previous quarter.
The South Orange County submarket, however, still leads the county with the highest average asking rate, at 66 cents per square foot. The Airport Area follows at 63 cents per square foot.
North OC is doing its part to create a larger industrial base, with slightly more than 1.1 million square feet under construction.
The Greater Airport Area, South OC and West Orange County have yet to see new construction. But the lack of available land in those areas plays a role in the lack of construction activity.
North, West OC
North Orange County, consequently, generated almost three times the gross activity, with 1.6 million square feet more than the airport area, which had the second-highest absorption in square footage at the end of the quarter: 647,054, which recorded 647,054 square feet at the end of the quarter.
The market is expected to continue to be tight until the county sees some of the square footage currently being planned actually start construction.
Schuler is a first vice president at CBRE.
