The Orange County industrial market saw about 3.3 million square feet of gross activity in the fourth quarter, bringing the 2011 year-to-date total to 11.5 million square feet of leases and sales.
The North Orange County submarket was the largest contributor in the fourth quarter, with more than 1.2 million square feet. The Greater Airport submarket followed with 893,414 square feet of gross activity.
Overall, the industrial market saw just more than 1 million square feet of positive net absorption for the period, bringing the full-year total to 1.3 million square feet.
The manufacturing and warehouse sector accounted for the majority of the absorption, with 807,493 square feet. The research and development market generated 261,891 square feet of positive net absorption.
All submarkets saw positive net absorption, with the Greater Airport Area leading the way with 515,016 square feet. South Orange County recorded 259,229 square feet of positive absorbed space. North Orange County accounted for 158,786 square feet of positive absorption. The West Orange County submarket added 136,353 square feet.
The county’s overall availability rate continued to decline, dropping to 8.1% from the previous quarter’s rate of 8.3%.
West Orange County was the only submarket to see increased availability in the fourth quarter, rising from 8.9% to 10.5% in the fourth quarter.
Fewer Vacancies
OC’s industrial vacancy rate continues to fall, dropping from 4% in the third quarter to 3.6% this quarter. All four of the region’s submarkets showed decreased vacancy levels, and the Greater Airport Area experienced the largest decline, dipping to 2.7% which represents a 23% quarter-over-quarter decrease. The manufacturing and warehouse sector currently holds a rate of 3.4%, decreasing from 3.8%, while the research and development market’s vacancy rate decreased from 4.9% to 4.3% in the fourth quarter.
Following an increase in the third quarter, the overall asking lease rate added an additional penny to now stand at 61 cents per square foot. The average asking rent for manufacturing and warehouse space remained unchanged at 53 cents per square foot, while the R&D segment rose to 86 cents from the previous quarter. The County’s average asking sale price decreased minimally to $122.50 per square foot. Manufacturing and warehouse properties average a sale price of $115 per square foot, while the overall average asking price for an R&D building is approximately $160 per square foot.
Analysis provided by CBRE Research.
