The vacancy rate in Orange County’s manufacturing and warehouse sector steadily decreased throughout 2013, but the fourth quarter held steady at 2.8%.
That was more a result of a lack of supply, as the demand for space continued to increase.
The county’s manufacturing and warehouse sector consists of 5,694 buildings totaling more than 209 million square feet.
The North OC submarket continued to have the lowest vacancy rate, 2.4%, followed by the Greater Airport Area, with a 2.9% vacancy rate.
South, West OC
South OC and West Orange County ended the quarter with vacancy rates of 3.2% and 3.7%, respectively.
The West Orange County submarket experienced the greatest quarter-over-quarter decline, dropping 24% from the third quarter.
The market, with nearly 2.2 million square feet of gross activity, recorded 329,879 square feet of positive net absorption.
Harbor Distributing LLC, based in Anaheim, purchased a 493,319-square-foot building in West Orange County, accounting for the majority of the net absorption.
North Orange County had a slower quarter than the third quarter, recording 74,616 square feet of positive absorption. West Orange County recorded 365,813 square feet.
South OC and the Greater Airport Area recorded negative absorption for the quarter, with 108,801 square feet and 1,749 square feet, respectively.
Average asking lease rates remained relatively flat throughout 2013.
The fourth quarter ended at 58 cents per square foot, triple-net, remaining unchanged from the second and third quarters. But the average asking lease rate for manufacturing and warehouse space was up 1 cent year-over-year.
Overall, lease rates are expected to increase over the next 12 months as commercial development in the Orange County region slowly makes a comeback.
All of the current development in the industrial sector is manufacturing and warehouse space in the North Orange County submarket.
The square footage under construction totaled 864,794 square feet at the end of the fourth quarter.
Speculative development remains in the pipeline, and there should be more development coming this year.
Data and analysis provided by CBRE Research.
