The manufacturing and warehousing segment of Orange County’s industrial market managed to make some progress in the first quarter, but the pace of improvement slowed significantly.
Manufacturing and warehousing buildings account for about 83% of the county’s total industrial market. There are nearly 5,700 manufacturing warehousing buildings here, combining for about 209 million square feet of space.
The segment had 304,012 square feet of positive net absorption in the first quarter, down from 1.5 million square feet in the fourth quarter of last year.
North County was the only submarket to post positive absorption, with a total of 698,606 square feet of space. That offset the 394,594 square feet of negative net absorption elsewhere and helped take the countywide vacancy rate to 3.7% in the first quarter, down from 3.8% in the fourth quarter and 4.6% a year earlier.
The North County submarket still accounted for 37% of the 7.6 million square feet of vacant manufacturing and warehousing space countywide in the first quarter.
Manufacturing and warehousing saw 373,944 square feet of negative net absorption in the first quarter in the greater airport area submarket. The airport area currently has 5.1 million square feet available and accounts for 35% of the county’s total vacant space.
South County accounts for about 16% of the total vacant space, while West County has about 11%.
The South County vacancy rate rose to 6.3% in the first quarter from 6.2% in the fourth quarter and 5.3% a year earlier.
The West County vacancy rate rose to 2.4% from 2.3% in the fourth quarter and posted a year-to-year drop of 3.3%.
The recent slowdown on leasing has been accompanied by a drop in average asking rents.
Asking rates for manufacturing and warehousing space throughout the county fell one cent in the first quarter from the prior period, to 51 cents a square foot. Asking rents dropped four cents from a year earlier, a dip of more than 7%.
Four manufacturing and warehousing buildings were completed recently and no new developments are under construction in the county.
Construction appears likely to remain weak until higher rents and other fundamentals can support speculative development.
Data and analysis provided by CBRE Research
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
