Optimism about the industrial real estate market in the area around John Wayne Airport rose through the first quarter.
The Greater Airport Area marked 1,078,592 square feet of gross activity for an increase of 185,178 square feet of activity from the fourth quarter. Irvine, at 428,492 square feet, saw the highest level of gross activity in the Greater Airport Area during the first three months.
The amount of industrial space vacated in the airport area still exceeded space leased for 447,259 square feet of negative absorption.
Below 2011 Levels
Manufacturing and warehouse space accounted for 312,282 square feet of the negative absorption, while the research and development segment held the balance at 134,977 square feet. Both product types performed below 2011 levels, but the stabilization of lease rates throughout the quarter may encourage tenants to re-engage.
Industrial space in the area held an average asking lease rate of 63 cents, unchanged from the previous quarter.
Manufacturing and warehouse space marked a 1 cent decrease from the fourth-quarter 2011 rate to 56 cents per square foot. Research and development space remained even with the previous quarter at 84 cents per square foot.
The amount of vacant square feet in the airport area totaled 2,071,913 in the first quarter, up 30% from the first quarter of 2011.
Vacancy Rates
Vacancy rates in manufacturing and warehouse space rose to 3% from a previous 2.4%, and in research and development space to 3.1% from 2.2%. Irvine held the highest vacancy rate at 4%, while Newport Beach maintained the lowest level with virtually no vacancies.
The amount of supply and quality of product hitting the market will continue to affect lease rates and demand. But the airport area remains strong and suggests a positive outlook for what’s to come for the remainder of this year.
Carroll is a sales assistant in the Newport Beach office of CBRE Group Inc.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
