Orange County’s manufacturing and warehouse market showed signs of improvement in the third quarter of 2010. The vacancy rate rose slightly from the prior quarter, going from 4.5% to 4.6%. That amounted to a significant gain compared to a year earlier, when the vacancy rate stood at 5.1%.
The base of 208 million square feet of manufacturing and warehousing space saw negative net absorption of 44,000 square feet, essentially flat for the third quarter.
The near break-even performance in terms of absorption reflected 2.3 million square feet of activity, with a million square feet in North Orange County, 640,000 square feet in West Orange County, 572,000 square feet in the John Wayne Airport area, and 90,000 square feet in South Orange County.
West County finished the quarter with the lowest vacancy rate, at 2.8%, down from 3.4% a year ago. North County had a 4.7% vacancy rate, down from 5.6%. The airport area remained stable at 5% vacancy. South County’s vacancy rate rose to 5.9% from 5.2% a year ago.
North County stood out as the only local area with manufacturing and warehousing space under construction, with half a million square feet in the works during the third quarter.
The average asking lease rate continued a downward trend, dropping 2 cents per square foot to 51 cents. Asking sale prices also continue to drop compared to last quarter and last year. The average asking sale price for the third quarter was $119.26 per square foot, down from $121.86 in the second quarter of 2010 and $137.41 a year ago.
The largest lease in the county in the third quarter was Modular Wind Energy’s lease of 167,778 square feet at 5800 Skylab Road in Huntington Beach. The largest sale was JP Morgan Chase & Co.’s purchase of a 281,548-square-foot distribution facility at 4633 La Palma Ave. in Anaheim for about a$20 million.
McAllister is a first vice president in the Anaheim office of CB Richard Ellis.
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