The industrial market around the greater John Wayne Airport area closed out 2011 with renewed signs of tenant confidence.
The manufacturing and warehouse segment marked a positive net absorption of 343,229 square feet in the final three months of last year, while research and development properties posted a positive net absorption of 171,787 square feet.
Those sectors have combined for more than 1 million square feet of positive net absorption in the airport area in 2012 so far.
Average manufacturing and warehouse rental rates remained the same in the fourth quarter compared with the prior period, at an average of 56 cents per square foot. That was almost 6% better than the average rate a year earlier.
The average rental rate for the market was 84 cents per square foot for research and development buildings, up 2 cents from the previous quarter and an increase of 2 cents from this time last year.
Meantime, there is a lack of available buildings evident in the area industrial market. All four of the region’s submarkets showed decreased vacancy levels in the fourth quarter, but the airport area posted the largest decline.
The vacancy rate in the airport area’s manufacturing and warehouse sector decreased to 2.9% from 3.5% in the third quarter and 4.2% a year earlier, while the R&D sector dipped to 2.2% from 3.4% the prior quarter and 4.5% a year earlier.
Positive momentum is expected to carry through the first quarter in industrial leasing in the market. There is a lack of supply, and average rental rates will continue to increase slightly. There also will be more competition for quality buildings.
But outside factors will bear watching for the balance of the year. Those include employment levels, gas prices and election-related events.
Bourne is a vice president in the Newport Beach office of CBRE Group Inc.
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