The Orange County industrial market continued to tighten in the fourth quarter and appears to be stabilizing.
The industrial market saw more than 1 million square feet of positive net absorption in the fourth quarter. That accounted for much of a total net absorption of nearly 1.3 million square feet for the full year.
The vacancy rate continued to fall in the fourth quarter, dropping to 3.4% from 3.8% the prior period. Lease rates seemed to be stabilizing, up by 1 cent from a year ago and steady from the prior period.
More gains might be on the horizon.
Industrial employment is projected to grow by 8,400 jobs by the end of 2013.
The total gross activity for the industrial market in the fourth quarter was 2,840,176 square feet.
The John Wayne Airport area had the greatest net absorption with 343,229 square feet, followed by South OC, at 190,095. North OC had positive net absorption of 153,425 square feet, and West OC had negative absorption of 120,774, though it maintained the lowest vacancy at 2.4%.
The manufacturing and warehouse segment of the market finished the fourth quarter with a decrease in its availability rate of 9.2%.
The segment’s average asking lease rate remained unchanged at 53 cents per square foot.
Sales of manufacturing and warehouse properties came to an average price of $115 per square foot.
It is worth noting that industrial vacancies have been decreasing regularly in recent quarters, with demand getting stronger.
There is little to no new construction in the county, so rental rates could rise significantly in the coming year.
Meantime, there is a lack of quality inventory in the OC market, as well as in neighboring submarkets.
Seybold is a senior vice president in the Orange office of CBRE Group Inc.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
