Gains for the Orange County industrial market in the fourth quarter indicated some momentum but fell short of making up for drop-offs earlier in 2012.
The industrial market accounted for 2.5 million square feet of gross activity in the fourth quarter, a 20% increase from the prior period.
11.4M for 2012
That brought the 2012 total to about 11.4 million square feet, down about 2% from a year earlier.
The fourth quarter had 571,361 square feet of positive net absorption. It was the only quarter of positive net absorption for the year.
The late surge didn’t entirely offset earlier trends, and the industrial market saw 336,237 square feet of negative net absorption for the whole year.
Adding to the late momentum, however, was a drop in availability and vacancy levels, which closed 2012 at their lowest points since 2008.
Availability Down
The overall availability rate continued to decline countywide, ending the year at 6.9%, compared with 7.2% in the third quarter and 8% a year earlier.
The vacancy rate declined quarter-over-quarter as well, dropping from 3.9% to 3.4%.
The average asking lease rate remained stagnant at $0.63 per square foot for the third consecutive quarter. The average asking sale price increased nearly a dollar from the previous quarter, to $127.67 per square foot.
Demand
The overall picture indicates demand, especially for class A buildings.
Developers have responded, with 1.2 million square feet of industrial space under construction in the fourth quarter, the highest total since 2006.
Projects
Current projects include the ongoing development of phases one and two of the Anaheim Concourse Distribution Center, while phase three is slated to break ground in the middle of 2013 and will total an additional 807,530 square feet.
Various build-to-suits in North Orange County also broke ground in the fourth quarter, and an 84,350-square-foot building in Brea remained under construction.
—Analysis provided by CBRE Research.
