The South Orange County commercial market held about steady in the second quarter, with some signs of recovery amid the slow pace.
The vacancy rate in the South Orange County office segment remained relatively high at 15.8%, although that marked improvements from 15.9% in the first quarter and 17.7% a year earlier.
One sign of improvement came on the average asking lease rate, which held even from the prior quarter at $1.98 per square foot. That broke a streak of 15 consecutive quarters of declining lease rates.
The office segment also shifted back to positive net absorption, eking out a gain of 4,809 square feet on a base of nearly 3.6 million square feet of space. The office segment remains on the negative side of net absorption for the year, down about 75,000 square feet.
The signs of stabilization are reflected in slight gains in office employment in Orange County and projections of an increase of 4% or more in office jobs by 2012.
The industrial market saw a mixed bag in South Orange County.
The research and development sector saw its vacancy rate drop to 6.2% in the second quarter from 7.3% in the prior period. The rate is up from 5.2% a year earlier.
The vacancy rate for the manufacturing and warehouse segment rose to 6.9% in the second quarter from 6.3% the prior period and 5% a year earlier.
Average asking rates continued to trickle down in the overall industrial market, finishing the second quarter at 72 cents per square foot compared to 74 cents a year earlier.
The retail vacancy rate held steady at 4.7%. Average asking rates were $2.69 per square foot in the second quarter, down one cent from the prior period and 25 cents from a year earlier.
Nourse is an associate in the Newport Beach office of CB Richard Ellis Inc.
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