Demand Surge Drives County’s Vacany Rate to 2.5%
Demand for industrial space surged in the third quarter, driving the amount of available space down further into record territory. The Q3 vacancy rate fell to 2.5%.
Net absorption totaled 744,306 sq. ft. as inventories tightened countywide.
The average triple-net lease rate ticked up to 84 cents per sq. ft. in Q3 and is up more than 10% from a year ago. The last time rents were as high was 2008 and the vacancy rate was 4.4%.
Not surprisingly, some landlords of premium space are hiking the automatic annual rent increase to 4% from 3%, which has been the boilerplate standard since before the recession. Orange County industrial owners and landlords have enjoyed a healthy run in the last six years during which 21 million sq. ft. have been absorbed and average rents have climbed more than 35%.
Full Report Available 3Q 2016 Industrial Market Report OC