Orange County’s manufacturing and warehouse market continued its resurgence through the first quarter of 2012.
Vacancy rates have dropped again from 3.2% in the fourth quarter 2011 to 3.1% in the first quarter.
The manufacturing and warehouse market also had 120,283 square feet of positive net absorption, which maintained the continued trend of increased activity.
Another significant positive indicator of the current state of the market is the increase of lease rates, which rose by 1 cent from the previous quarter and 3 cents from the first quarter of last year to 54 cents per square foot.
Jobs
There may be continued growth in the not-too-distant future, with about 18,200 jobs being added in Orange County since February of last year.
The total gross activity during the first quarter for manufacturing and warehouse in OC was 2,852,675 square feet. North OC had the greatest net absorption with 363,421 square feet, followed by South OC with 198,995 square feet.
West OC and the area around John Wayne Airport had negative net absorption in the first quarter of 129,851 and 312,282 square feet, respectively, but maintained low vacancy rates of 2.9% and 3%.
The market’s increase in rates and continued demand has led to speculative new construction totaling 110,350 square feet.
Projects included an 84,350-square-foot building in Brea and a 26,000-square-foot build-to-suit property in the Irvine Spectrum.
There is also about 840,000 square feet of new development at the Anaheim Concourse, which will begin the construction phase before year-end.
Pricing should rise as vacancy rates continue to hover at historical lows. Demand continues to be strong, and there is little availability for land leading to new construction.
Steve Young is a senior associate in the Orange office of CBRE.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
