The research and development sector marked took a step back in the first quarter.
Research and development buildings had 505,123 square feet of gross absorption in the first quarter, up from the 460,571 square feet of gross activity recorded in the fourth quarter of last year. Yet the sector ended the first quarter with 211,913 square feet of negative absorption, and vacancy rates increased to 4.7% from 4.2% in the previous quarter.
The research and development sector represents about 17% of Orange County’s total industrial square foot base, with 1,096 buildings and more than 42 million square feet of space.
Bulk of R&D
The majority of the region’s research and development buildings are is located in the area near John Wayne Airport and South OC, which account for 28.1 million square feet, or more than 65%, of the total market space.
North OC is the third-largest research and development submarket, with more than 9.7 million square feet of space. West OC has almost 5 million square feet of research and development space available.
Average asking lease rates for research and development product still demonstrate a downward trend. Asking rents for the county were down 2 cents on average from the previous quarter to 86 cents per square foot.
The first quarter’s average lease rates ranged from a low of 71 cents per square foot in North OC to a high of 91 cents per square foot in South OC.
There are no new research and development buildings under construction in the county. Companies relocating will continue to look to existing projects that offer a strategic advantage to facilitate growth in the coming years.
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.
