{"id":887,"date":"2025-09-17T15:11:34","date_gmt":"2025-09-17T22:11:34","guid":{"rendered":"https:\/\/www.lee-associates.com\/newportbeach\/?p=887"},"modified":"2025-09-17T15:13:45","modified_gmt":"2025-09-17T22:13:45","slug":"q1-2025-market-report-industrial","status":"publish","type":"post","link":"https:\/\/www.lee-associates.com\/newportbeach\/2025\/09\/17\/q1-2025-market-report-industrial\/","title":{"rendered":"Q1 2025 MARKET REPORT &#8211; INDUSTRIAL"},"content":{"rendered":"<h2 style=\"text-align: center\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-896\" style=\"--tw-scale-x: 1;--tw-scale-y: 1;--tw-scroll-snap-strictness: proximity;--tw-ring-offset-width: 0px;--tw-ring-offset-color: #fff;--tw-ring-color: #3b82f680;--tw-ring-offset-shadow: 0 0 #0000;--tw-ring-shadow: 0 0 #0000;--tw-shadow: 0 0 #0000;--tw-shadow-colored: 0 0 #0000\" src=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-12-512x88.png\" alt=\"\" width=\"1431\" height=\"246\" srcset=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-12-512x88.png 512w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-12-1280x221.png 1280w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-12-768x132.png 768w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-12-1536x265.png 1536w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-12.png 1700w\" sizes=\"auto, (max-width: 1431px) 100vw, 1431px\" \/><span style=\"color: #800000\"><strong>DEMAND FALLS FOR NINTH STRAIGHT QUARTER; RENTS OFF 10%<\/strong><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\" wp-image-897 alignright\" src=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-13-205x512.png\" alt=\"\" width=\"313\" height=\"781\" srcset=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-13-205x512.png 205w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-13-615x1536.png 615w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-13.png 728w\" sizes=\"auto, (max-width: 313px) 100vw, 313px\" \/><\/p>\n<p>Despite decent overall economic growth and healthy levels of trade through the twin ports of Long Beach and Los Angeles, first-quarter demand for Orange County industrial space fell for the ninth straight quarter. Asking rents declined nearly 10% over the period.<\/p>\n<p>First-quarter net absorption was negative 626,940 SF. That follows last year\u2019s absorption decline of 5.2 million SF and a 2.6-million-SF contraction in 2023. The countywide inventory totals 278 million SF. During the two-year skid, the countywide vacancy rate climbed from 1.8%, a record low, to 5.8%. Vacant space now totals 16 million SF. In the recession following the 2008 financial crisis, empty space peaked at 20 million SF and the vacancy rate hit 7.1%.<\/p>\n<p>In some aspects the current weakened demand has been reflective of the national picture. Lingering supply-chain issues from Covid caused many business owners to pause expansion plans, while higher interest rates slowed home sales and purchases of home improvement materials and appliances. Caution continued to hobble growth throughout last year and the election season as business owners weighed the potential impact of promised tariffs.<\/p>\n<p>Meanwhile, however, trade through the Port of Long Beach rose in February for the ninth straight month as retailers continued to move goods ahead of imposition of tariffs. The Port of Los Angeles posted a monthly record in January and the second busiest February ever.<\/p>\n<p>Among the county\u2019s four submarkets, only the 117-million-SF North County submarket \u2013 the county\u2019s largest \u2013 posted positive net absorption in the first quarter with 430,097 SF of tenant growth thanks to two major direct leases in Anaheim:\u00a0Straub Distributing leased a 281,548-SF building at 4633 La Palma Ave. and Legrand Manufacturing leased the 194,357-SF Bedrosian Tile &amp; Stone building at 1515 E. Winston Road.<\/p>\n<p>Net absorption has been negative for eight of the last 10 quarters in the 44-million-SF South County submarket and tenants shed 383,665 SF in the first quarter, driving up the vacancy rate 50 basis points to 5%. The 73.5-million-SF Airport submarket was 372,490 SF in the red due, in part, to three deliveries totaling 278,624 SF.<\/p>\n<p>There were 300,882 SF of negative net absorption in the 44-million-SF West County submarket in Q1, the biggest quarterly loss since late 2020.<\/p>\n<p>Adient Aerospace, a builder of business-class seats for commercial aircraft, signed a 280,460-SF sublease at 5701 Skylab Rd., Huntington Beach, for $1.05 per SF triple net. The agreement helped reduce the countywide total of second-hand space from its record high of 2.8 million SF.<\/p>\n<p>Motion Industries signed a 10-year lease for 62,717-SF building at 3373 E. La Palma Ave., Anaheim. The tenant, an industrial products distributor, was allowed two months of free rent, reducing the effective rent to $1.72 per SF.<\/p>\n<h2 style=\"text-align: center\"><strong><span style=\"color: #800000\">MARKET FORECAST<\/span><\/strong><\/h2>\n<p>Cal State Fullerton\u2019s quarterly survey of Orange County business leaders\u2019 economic expectations produced a rating of 85.9%. The index was up from 73.1% in the fourth quarter of 2024, indicating significantly improved business sentiment early in the year and the biggest gain in three years.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-898\" src=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-21-512x443.png\" alt=\"\" width=\"1398\" height=\"1210\" srcset=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-21-512x443.png 512w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-21-1280x1108.png 1280w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-21-768x665.png 768w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-21-1536x1329.png 1536w, https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial-21.png 1700w\" sizes=\"auto, (max-width: 1398px) 100vw, 1398px\" \/><\/p>\n<p><a href=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Q1-Market-Report-Industrial.pdf\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-891 aligncenter\" src=\"https:\/\/www.lee-associates.com\/newportbeach\/wp-content\/uploads\/sites\/116\/2025\/09\/Blue-Modern-Game-Button-Twitch-Panel.png\" alt=\"\" width=\"320\" height=\"100\" \/><\/a><\/p>\n<h4><span style=\"color: #800000\"><strong>ABOUT LEE &amp; ASSOCIATES<\/strong><\/span><\/h4>\n<p>Celebrating more than 46 years of leadership excellence in commercial real estate, Lee &amp; Associates is the largest broker-owned firm in North America with locations across the U.S. and Canada.<br \/>\nWith a broad array of regional, national and international clients \u2013 ranging from individual investors and small businesses to large corporations and institutions \u2013 Lee &amp; Associates has successfully completed transactions with a total value of more than $32 billion in 2022.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>DEMAND FALLS FOR NINTH STRAIGHT QUARTER; RENTS OFF 10% Despite decent overall economic growth and healthy levels of trade through the twin ports of Long Beach and Los Angeles, first-quarter demand for Orange County industrial space fell for the ninth straight quarter. Asking rents declined nearly 10% over the period. First-quarter net absorption was negative 626,940 SF. That follows last year\u2019s absorption decline of 5.2 million SF and a 2.6-million-SF contraction in 2023. The countywide&#8230;<\/p>\n","protected":false},"author":260,"featured_media":617,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-887","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-reports"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.5 (Yoast SEO v28.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Demand Falls for Ninth Straight Quarter in Industrial Market - Lee &amp; Associates | Newport Beach<\/title>\n<meta name=\"description\" content=\"Find out why demand falls for ninth straight quarter. 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