The fourth quarter in West Orange County continued to demonstrate positive trends the submarket has been consistently witnessing.
It had a substantial decrease in vacancies during the quarter, with a rate of 3.4%. Garden Grove is one of the tightest locations in West Orange County, with a 1.2% vacancy rate.
Lease Rates
The submarket, similar to previous quarters, continued to have rising sale prices due to the decrease in vacancies and the lack of availability. But lease rates remained fairly stagnant from the third quarter, with a decrease of 1 cent, dropping to 59 cents per square foot, triple-net, at the end of the quarter. Conversely, the average asking lease rate increased 3.5% year-over-year.
The positive net absorption almost doubled in the fourth quarter with the sale of a 493,319-square-foot building in Huntington Beach, generating 447,186 square feet. That brought the year-to-date net absorption total for West Orange County to 928,617 square feet.
Morgan Stanley welcomed a new 24,257-square-foot tenant, Zenith Freight, to its Garden Grove portfolio, with a starting lease rate of 50 cents triple-net, per square foot, per month. Czarnowski Display Service recently leased 45,578 square feet from the Warland Investment Co. in Cypress, with a starting lease rate of 67 cents triple-net, per square foot, per month.
Shea Properties is commencing construction on its two industrial buildings at 17332 Gothard St. in Huntington Beach. The 94,572-square-foot and 50,182-square-foot buildings are expected to be completed in the fourth quarter.
Goodmanson is a senior vice president, and Schneider is an associate analyst with CBRE.
