Orange County’s manufacturing and warehousing sector regained momentum in the fourth quarter.
The gains came throughout OC, bringing 364,937 square feet of positive net absorption in the fourth quarter. That brought the gross activity for the fourth quarter to roughly 1.9 million square feet, which fell short of 2011 levels.
Vacancies, Lease Rates
The vacancy rate fell to 3% from 3.5% in the prior quarter and 3.4% a year earlier.
The countywide average asking lease rate for manufacturing and warehousing space rose to 57 cents per square foot in the fourth quarter, up a penny from the prior period and 4 cents from a year earlier.
The bulk of the fourth quarter’s activity occurred in the North Orange County submarket, which saw 830,693 square feet of gross leases and user sales. The Greater Airport Area posted 536,322 square feet of gross activity for the quarter. The West OC submarket accounted for 282,999 square feet, and South OC posted 272,134 square feet.
South OC had the highest average lease rate, at 67 cents per square foot, followed by the airport area (62 cents) and West OC (53 cents).
North Orange County had the lowest average lease rate, at 51 cents.
Continued high demand, dropping vacancy rates, rising lease rates, and limited availability have prompted some developers to begin building manufacturing and warehousing space in Orange County for the first time since 2007.
An 84,350-square-foot building broke ground in the second quarter of 2012 in Brea, and the first phase of the 864,794-square-foot Anaheim Concourse project by Panattoni Development Co. recently started.
The project includes an additional 790,000 square feet that’s slated to start midyear.
There also is 198,414 square feet under construction in La Habra and 97,000 square feet in Fullerton.
—Data and analysis provided by CBRE Research.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
