South Orange County marked an upbeat first quarter in its industrial, office and retail real estate segments.
South OC saw 128,278 square feet of positive net absorption of industrial space in the first three months.
South OC absorption—together with the northern portions of the county—has continued to drive down Orange County’s overall industrial-space availability rate from 8% to 7.8%.
Availability
South OC still maintains the highest availability rate in the county at 11.5%.
That number should continue to decline through this year amid increased activity for larger industrial spaces.
South OC’s average rates on industrial leases was 78 cents compared to 62 cents average lease rates in OC overall.
The South OC office market continued on a strong path in the first quarter, with more than 416,000 square feet of positive net absorption. Several large office leases pushed South OC to the most absorption in the county’s office market during the period.
Average asking rates for South Orange County office space was $1.95 compared to $1.93 for the county as a whole. South OC had an office vacancy rate of 12.8% in the first quarter compared to the countywide vacancy rate of 15%.
Large blocks of class A office space are now scarce throughout South OC, but availability persists in the class B and low-rise office buildings.
Retail
The South OC retail market had positive absorption of 103,430 square feet, dropping vacancy down to 5%. The average asking rent for the submarket is $2.72.
Overall, the South OC market saw strong buyer demand and increased activity from larger tenants. Expect to see continued positive absorption and lower vacancy throughout the year.
Kayl is a vice president in the Newport Beach office of CBRE Group Inc.
