The first quarter continued to demonstrate the consistency in demand in West Orange County’s marketplace.
The market for the past few quarters experienced a further decrease in vacancies that has brought down the rate to 2.3%. It has therefore experienced an increase in lease rates over that time frame, bringing the rate up to 61 cents triple-net, per square foot, per month. The average asking lease rate has increased 7% year-over-year.
The market, as in previous quarters, continued to have rising sale prices due to the decrease in vacancies and the lack of availability. The numbers are record lows for the Orange County industrial market. Surprisingly, with all of the tenant and buyer demand, the market still saw 40,800 square feet of negative net absorption in Garden Grove.
Morgan Stanley
Morgan Stanley welcomed a new 167,778-square-foot tenant, Mitsubishi Electric Automotive America, to its Huntington Beach portfolio. And California Relocation Services Inc., an existing 19,278-square-foot tenant of Morgan Stanley’s Garden Grove portfolio, renewed its existing lease at a starting rate of 58 cents triple-net, per square foot, per month. The market also has experienced a comeback in condominium sales, including the recent sale of a condo totaling about 2,500 square feet for $244 per square foot.
Development is fully under way on two state-of-the-art buildings in Huntington Beach by Shea Properties. The 50,182-square-foot and 94,572-square-foot distribution buildings will have 10% office uses and are scheduled to be completed in December.
Goodmanson is a senior vice president with CBRE, and Schneider is an associate analyst.
