The healthy activity levels for industrial buildings seen in 2011 carried over into the first quarter of 2012 in Orange County.
The market generated about 3.4 million square feet of gross leasing and user sale activity in the first three months. Activity dipped 2% from the fourth quarter; yet it represented a 15% improvement compared to the first quarter of last year.
North OC led the region with the majority of the gross activity at about 1.3 million square feet. The Greater Airport Area was second with 1.1 million square feet.
Prices for OC’s industrial space continued their gradual increase for the third straight quarter. The average asking lease rate gained an additional cent to end the first quarter at 62 cents per square foot. The average asking rent for manufacturing-and-warehouse space also marked a 1 cent increase, to 54 cents per square foot.
Rents for research-and-development space shed 2 cents for an average asking rate of 84 cents per square foot. The lowered average is due to a significant decline of West OC’s lease rate, which declined by 6 cents this quarter to 70 cents per square foot.
The average asking lease rate for South OC’s research-and-development space fell 2 cents to an average 91 cents per square foot. Average asking sale prices for owner/user opportunities increased to $126 per square foot, or $3 higher than the average recorded in the fourth quarter.
Vacancies
The county’s overall availability rate dropped to 7.8% from the previous quarter’s rate of 8%. This latest decline reflects a significant drop from the first quarter of 2011, when the availability rate stood at 8.6%.
Overall vacancy levels, in contrast, rose this quarter from 3.3% to 3.4%, the result of tenant vacancies of available properties previously on the market. The vacancy rate for manufacturing-and-warehouse space dipped slightly this quarter to 3.1% from 3.2%, while the vacancy rate for research-and-development buildings in-creased to 4.7%.
Overall the market had 91,630 square feet of negative net absorption. North and South OC posted positive absorption, with 354,439 square feet and 128,278 square feet, respectively. That was offset by data from the Greater Airport Area, where there was 447,259 square feet of negative absorption, and West OC, which had 127,088 square feet of negative net absorption.
No new industrial projects were completed in the first quarter. About 84,000 square feet broke ground this quarter in Brea on a new, speculative manufacturing-and-warehouse building.
Phases one and two of the Anaheim Concourse are scheduled to break ground later this year, including eight buildings totaling 840,000 square feet.
Analysis provided by CBRE Research.
