Activity Held Steady During 4th Quarter
- The vacancy rate in Orange County increased by 50 basis points to 2.8% during the fourth quarter. Vacancy stood at 2.6% one year ago.
- Asking rental rates increased 6.9% from one year ago to $0.93 per square foot (PSF) triple net (NNN).
- Industrial demand recorded 83,300 square feet of net absorption. Much of this demand was concentrated in the West County submarket.
The Beckman Business Center delivered to the market totaling 934,800 square feet, leaving 368,800 square feet under construction.
- Although demand was positive for the quarter, vacancy rates increased due to vacant construction delivering to the market. Asking rental rates are expected to rise an additional 3-5% by the end of 2019.
Orange County Industrial Market:
The Orange County industrial market closed the fourth quarter with net absorption recording positive movement at 83,300 square feet. Industrial product continues to deplete in Orange County as many properties are being sold for multifamily redevelopment or creative office space conversion.This is especially true for the industrial inventory located in the Irvine and Newport Beach market areas, with demand outweighing supply.
Despite positive market fundamentals, tenants are struggling to find future space options to meet their needs given the lack of available inventory.