The research and development segment of the Orange County real estate market saw little improvement in the second quarter.
The R&D segment saw 610,400 square feet of gross absorption in the second quarter, 21% more than in the first quarter. There was negative net absorption of 359,773 square feet in the quarter, and vacancy rates increased to 5.9% from a 5.1% in the first quarter.
Lease Rates
Average asking lease rates for research and development space were down 5 cents from the previous quarter and currently stand at 79 cents per square foot.
The second quarter’s average lease rates ranged from a low of 62 cents per square foot in North OC to a high of 92 cents per square foot in South OC.
There are 1,104 buildings geared toward research and development with 43 million square feet of space. That amounts to 17% of OC’s total industrial space.
Most of the region’s research and development buildings are in the area around John Wayne Airport and in South OC. The 28.3 million square feet in those submarkets represents 65% of the total research and development space in the county.
North OC is the third-largest R&D submarket with more than 9.7 million square feet of space.
West OC has almost 5 million square feet of research and development inventory, the smallest of the submarkets.
There are virtually no new R&D buildings under construction in the county. For the immediate future, companies will have to focus on the existing inventory and choose space that offers a strategic advantage.
Data and analysis provided by CBRE Group Inc.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
