By ROSS BOURNE
Orange County’s low-rise office market got a little better in the third quarter but still is feeling the effects of the global recession and a high unemployment rate, currently at 9.6% locally.
The number of leases in the low-rise segment, which accounts for 55 million square feet, increased from the second quarter, taking the vacancy rate down slightly from the second quarter to 15.3%.
Vacancy rose 7% from the third quarter of 2009.
The availability rate for the third quarter, including space that’s expected to be vacant soon, offered a sign of stability with a decline to 20.8%.
That’s a significant decrease from 22.3% in the second quarter. Both the vacancy and availability rates have gradually decreased in the past two quarters, with expectations of a continual steady decline.
The low-rise market saw net absorption of 217,240 square feet for low-rise in the third quarter, offsetting earlier declines to bring the year-to-date total to 92,273 square feet.
The South Orange County submarket has contributed the majority of the annual total, with 157,745 square feet of absorption.
Average asking monthly rates continue to fall despite the recent absorption, down seven cents from the second quarter to $1.87 per square foot.
That’s a decline of 24 cents—or 11%—from a year ago.
Construction in the low-rise market remains at a standstill, with no projects expected to begin in the near future. The last low-rise office complex completed, a 90,000 square-foot build-to-suit for Carl’s Jr. parent CKE Restaurants Inc. in Anaheim, came in the first quarter of 2009.
Bourne is a senior associate for the Newport Beach office of CB Richard Ellis Group Inc. Data and analysis provided by CB Richard Ellis Research.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
