News

DESPITE COVID, LEASING ACTIVITY GAINS The Covid-19 pandemic eased its grip on the industrial market as third-quarter leasing activity bounced back along with slight improvement in overall absorption. Rental rates in 2020 have increased at a slower rate than any year since 2008. Net absorption was 150,642 SF in the red in the third quarter, but that was an improvement from Q2, when tenants shed 359,636 SF and as Orange County and much of the…

ACTIVITY SWOONS FROM COVID-19 LOCKDOWN Leasing activity slowed dramatically in the second quarter as the economic disruption of Covid-19 forced companies to temporarily close offices, furlough workers and transition others to work remotely. There were 252 lease transactions from April through June, a 43% reduction compared to the first quarter. The volume of space leased in Q2 also fell 39% to 1.1 million SF. In contrast, there was more leasing during the worst of the…

Demand Flags Amid Covid-19 Uncertainty The sudden economic downturn brought on by the Covid-19 pandemic dramatically cut second-quarter leasing activity and deal volume to their lowest levels since the 2008-09 recession. Net absorption also fell into the red in Q2 as the vacancy rate ticked up 30 basis points to 3.5%. There were 367 lease deals in Q2, a nearly 26% decline from the first quarter, and leasing volume fell 51% to 2,072,884 SF, an…

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…