The vacancy rate in the Orange County manufacturing and warehouse sector steadily decreased over the past 12 months from 2.8% to 2.5% at the end of the first quarter.
Available space is tight throughout the county. The North OC submarket continued to hold the lowest vacancy rate, 2.3%, followed by West Orange County, with a rate of 2.4%. South OC and the Greater Airport Area ended the quarter with vacancy rates of 2.9% and 2.8%, respectively. The West and South Orange County submarkets experienced the greatest quarter-over-quarter decline, dropping 25% from the fourth quarter.
The overall sector consists of 5,694 buildings totaling more than 209 million square feet.
There was approximately 2.1 million square feet of gross activity during the quarter. The market recorded 581,753 square feet of positive net absorption.
North OC remained relatively on par with the fourth quarter, recording 78,203 square feet of positive absorption. West Orange County recorded 263,404 square feet of positive net absorption, the most of the four submarkets. South Orange County and the Greater Airport Area also recorded positive absorption, with 156,735 square feet and 83,411 square feet, respectively.
Average asking lease rates remained relatively flat throughout 2013. The first quarter experienced an increase of 2 cents, ending at 60 cents overall. Year-over-year, the average asking lease rate increased 4 cents. The highest asking rate continued to be in South Orange County, at 68 cents per square foot. Overall, lease rates are expected to continue their climb over the next 12 months.
Commercial development in the Orange County region is slowly making a comeback. In the industrial sector, all of the current development is manufacturing and warehouse space in the North and West OC submarkets. Square footage under construction totaled 1.1 million square feet at the end of the first quarter. Speculative development remains in the pipeline, and the county should have more development coming over the next 12 months.
Data and analysis provided by CBRE Research
