The Greater Airport Area slowed down a bit in the second quarter after a strong close to 2010 and carry over through the first quarter.
The office and industrial markets around John Wayne Airport both saw positive absorption for the quarter; yet it wasn’t enough to boost the confidence of either landlords or tenants.
With a base of 68.6 million total square feet, the airport area industrial market saw 170,430 square feet of absorption in the second quarter.
The manufacturing and warehousing segment drove the gain, absorbing more than 200,000 square feet.
The research and development segment recorded negative net absorption of 37,015 square feet of space.
The vacancy rate in the manufacturing and warehousing segment fell to 4.7% from 5% the prior quarter.
The rate increased for research and development space, which went to 5.5% from 5.3% in the first quarter.
Average asking lease rates for manufacturing and warehousing buildings rose to 53 cents a square foot from 50 cents in the first quarter.
Lease rates remain low, with the second-quarter average 7% below the beginning of last year.
The research and development sector is in similar shape, with the second quarter average asking lease rate down 8.1% from a year ago.
The Greater Airport Area office market recorded another quarter of positive net absorption but also saw its momentum slowed.
The office market’s 208,716 square feet of positive absorption in the second quarter followed 630,000 square feet on the plus side in the prior quarter.
The vacancy rate for the office segment fell to 16.7% from 7.2% the prior quarter.
Average asking lease rates ended the second quarter at $2.01 per square foot, down slightly from $2.02 at the end of the prior period and 5.6% from a year earlier.
Despite the recent volatility in the stock markets and traditional “summer slowdown,” market conditions are primed for a strong close to 2011.
Zanolli is an associate in the Newport Beach office of CB Richard Ellis.
