South Orange County’s industrial market showed growing strength at year’s end.
The market had 259,229 square feet of net absorption in the fourth quarter, amounting to 24% of the total net absorption in the county. South OC’s absorption gains helped OC’s availability rate dip to 8.1% by year’s end from 8.3% at the end of the prior quarter.
South OC’s availability rate still remained the highest in the county at 11.5%, primarily due to several larger blocks of space that have yet to lease up. There has been an increase in activity on a few larger buildings recently.
South Orange County’s average asking rate for industrial space was 76 cents and for office space $1.98. Those rates compared with countywide averages of 61 cents and $1.94, respectively.
South OC’s office market mirrored the strong positive absorption and stabilization of lease rates seen in the county overall, with a 14.6% fourth-quarter vacancy rate comparing to a countywide rate of 15.3%. Larger blocks of class-A office space are scarce, but availability persists in class-B and low-rise campus office space.
Retail was the only property segment that had negative net absorption for the fourth quarter. Average asking rents rose 2 cents from the third quarter to $2.74.
Meantime, there is little new construction in South OC or anywhere else in the county.
Strong buyer demand, larger tenant activity and stabilized pricing means South OC should expect increased absorption and lower vacancy levels after the first quarter.
Morrow is a senior associate in the Newport Beach office of CBRE Group Inc.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
