The South Orange County commercial market saw some positive activity during the third quarter. The office market led the way in positive net absorption, while the industrial market continued to perform at a steady pace.
The South OC office vacancy rate fell to 15.3% from 15.8% with more than 100,000 square feet of positive net absorption. For the second consecutive quarter, there were signs of stabilization as the overall average asking lease rate remained constant at $1.98 per square foot.
The majority of this quarter’s activity was seen in class B low-rise buildings, which leased up more rapidly than any other product.
The research and development segment saw an increase in the vacancy rate in the industrial sector, going from 6.3% in the second quarter to 8.8% in the third quarter.
This negative net absorption of 327,358 square feet was mainly due to a single tenant vacating about 300,000 square feet in Mission Viejo.
The vacancy rate for manufacturing and warehouse space dropped to 5.9% in the third quarter, down from 6.1% in the second quarter.
Average asking rents have grown from $0.63 to $0.64 per square foot in the last 12 months. The short-term forecast continues to call for an overall increase in manufacturing and distribution employment.
Retail vacancy increased from the last quarter to 5.5% from 4.6%. Average asking rates increased three cents to $2.72 per square foot.
Bates is a first vice president in the Newport Beach office of CBRE.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
