Occupancy levels varied among the office, industrial and retail segments of North and Central Orange County during the third quarter, but all had lower lease rates.
North and Central OC account for more than 3,400 commercial properties totaling almost 180 million square feet. All segments except the office sector finished the period with average vacancy rates below 7%.
Construction
Construction of new buildings in the submarkets remains low but is gaining momentum, with about 84,350 square feet of industrial space and 460,000 square feet of retail space in the development phase by the end of the third quarter. Demand slowed down during the quarter, with 80,314 square feet of overall negative net absorption for the period.
The vacancy level for office space in North and Central Orange County dipped in the third quarter to 14.5% from 15%. The increased occupancy was partly due to 117,935 square feet of positive net absorption that occurred this quarter. The average asking lease rate for available space in these submarkets continued to decline.
Industrial
The industrial market—comprised of 2,539 manufacturing and warehouse buildings and 191 research and development properties—saw a decline in activity in the third quarter. There were just more than 660,000 square feet total gross leases and sales recorded in the third quarter in a 60% decline from the previous three months.
The submarket marked an overall 194,578 square feet of negative absorbed space. That led to an increased vacancy rate of 3%, the lowest of all the submarkets.
The average asking lease rate in the manufacturing and warehouse sector moved down 1 cent to 48 cents per square foot, while the research and development segment declined 3 cents to 59 cents per square foot.
Retail
The vacancy rate remained unchanged, at 6.4%, for the 283 retail centers in North and Central OC.
There was negative 3,671 square feet of net absorption for retail in the third quarter. The average asking lease rate for retail space dipped 3 cents to $2.08 per square foot.
One new retail center broke ground in the quarter, with work starting on a 460,000-square-foot mall in Buena Park.
Analysis provided by CBRE Group Inc.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
