The research and development segment of the industrial real estate market is gaining momentum.
The area near John Wayne Airport and South Orange County represent the largest base of the submarket with almost 28 million square feet, or 65%, of OC’s total 42 million square feet in R&D space.
Activity has been strongest in the airport area, which marked 171,787 square feet of positive net absorption and 239,641 square feet of gross activity in the fourth quarter.
There was 69,134 square feet of gross activity in South OC, 15,609 square feet in West OC and 5,361 square feet in North OC during the same period.
R&D companies are experiencing growth again amid renewed investor activity, as larger corporations acquire smaller startups, which has helped fill vacant space.
Fourth-quarter vacancy levels dropped 12% from the previous quarter to 4.3% overall—still higher than a year ago.
Average asking rents rose 1 cent per square foot from the previous quarter and 5 cents from a year earlier.
The current average rent for R&D space is 86 cents per square foot.
Morrow is a senior associate in the Newport Beach office of CBRE Group Inc.
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
