News

Coronavirus Hobbles Strong Market Demand for industrial space through March was the strongest of the last 15 quarters, pushing the vacancy rate down to 3.4% just as California, the nation and world were hit with the biggest health crisis in 100 years, throwing the global economy into reverse. Nearly 10 million U.S. workers, including 1 million Californians, sought initial jobless claims in the last two weeks of March. Cal State Fullerton said the index in…

VIRUS THREATENS OFFICE GROWTH Healthy tenant demand for office space continued through the first half of March when the global coronavirus crisis hit home. For most of last year companies were expanding their office footprints in Orange County and lately finding the effective rents in premium buildings to be irresistible. Virtually overnight, however, and barely a decade after the last recession people are speaking of a “new normal” but without yet knowing exactly what it…

Demand Eases, Rent Growth Slows Despite healthy fourth-quarter growth from nearly 318,000 SF of net absorption, demand for Orange County industrial space in 2019 ended in negative territory for the third straight year and rents grew at their lowest rate in five years. Net absorption for the year was negative 1.26 million SF spread across the county’s four markets – North, South, West and Airport – that virtually are built-out with 273.8 million SF of…

HEALTHY DEMAND GREETS NEW BUILDINGS Orange County’s expanding inventory of premium office space was met in 2019 with the most tenant demand in three years as 12 buildings totaling 1.3 million SF were completed in the South County and Airport submarkets. Rent growth countywide flattened out in 2019 compared to the 6% average annual gain for the previous six years. Net absorption in the Airport market totaled 855,231 SF in 2019, a turnaround from the…

LEASE RATES LEVEL OFF, DEAL VOLUME FALLS Tenant demand for Orange County industrial space posted a slight overall gain in the third quarter. But asking lease rates have leveled off this year after increasing an average of about 5% annually for the previous three years. Following five straight quarters of negative absorption countywide, net absorption totaled 77,114 SF in Q3. But demand was uneven. North County and West County combined for 356,401 SF of positive…

APPETITE FOR CLASS B SPACE FUELS 2019 ABSORPTION Demand for office space through the third quarter has surpassed annual net absorption totals for each of the last two years with Class B space around John Wayne Airport capturing the lion’s share of the recent overall tenant growth. Countywide net absorption in the third quarter hit 144,508 SF, bringing the total for the year to 849,431 SF. That exceeds the 756,460 SF of absorption posted in…

TENANT DEMAND, RENT GROWTH COOLS Easing overall demand for industrial space continued in the second quarter, pushing up the countywide vacancy rate to 3.9%, a percentage point more than a year ago and its highest in five years. Tenants shed 519,062 SF in the second quarter and 1,826,119 SF of space in the first half, the most since the recession. South County was the only market with positive net absorption in Q2 with 206,512 SF…

STRONG FIRST-HALF DEMAND; AIRPORT MARKET LEADS TENANT GROWTH Demand for Orange County office space posted the strongest first half in four years, led by solid tenant growth that lately is trending in the direction of Airport-area buildings. The overall market is in its ninth straight year of steady tenant expansion, during which occupancy gained 12.4 million SF. Net absorption has been positive for 30 of 36 quarters. At the same time 46 buildings have been…

RENTS SPIKE AS EASING DEMAND CONTINUES Lease rates jumped a record 4.7% in the first quarter and gained 8.8% year over year for the largest quarterly and annual increases since the recession. At the same time, first-quarter demand for space posted its biggest three-month decline in more than eight years, pushing up the countywide vacancy rate 70 basis points to 3.5%. Despite otherwise healthy leasing activity, the county’s four major submarkets – Airport, North, South…