VACANCIES HIT NEW LOWS; RENT GROWTH TOPS 16%Continued strong demand for industrial space pushed the countywide vacancy rate to a record low 2% in the first quarter, and asking rents, which have increased about 7% annually over the last five years, posted record average gains of 5.2% in the first quarter and 16.6% year over year.Lee & Associates’ quarterly survey of buildings 10,000 SF and up shows 8,251 buildings with 274.2 million SF, a supply that gradually has declined 2% from its 2008
LANDLORDS AWAIT FULL "RETURN TO OFFICE"The office market suffered a mild Covid relapse in the first quarter as companies shed 550,126 SF of space. It was the biggest three-month retreat in a year. It follows Q4’s strong net absorption total of 610,486 SF, the second largest quarterly gain in five years. The weakness is confounding hopes that vaccine availability, plunging Covid infection rates and corporate America’s “return to office” plans would begin to reverse the contraction now totaling 2.7 million SF since the first
DEMAND FOR SPACE INTENSIFIED IN 2021Demand for industrial space in Orange County, already one of the hottest markets in the country, continued to set records in 2021.Out of a total inventory of 274.1 million SF surveyed by Lee & Associates, only 5.8 million SF are vacant. Year-over-year rent growth averaged a record 16% countywide in 2021. Net absorption in 2021 totaled 1.8 million SF. It was the most tenant growth in six years, during which average rents have increased 83% countywide.Orange County industrial space
HEALTHY TENANT GROWTH RETURNED IN Q4After six straight quarterly losses since the lockdown, countywide demand for space returned in the fourth quarter with positive net absorption across all five county submarkets.There were 610,486 SF of net absorption in Q4. It was the third strongest quarter since 2015. The healthy end to the year reduced the countywide losses for 2021 to 711,560 SF, an improvement from the 1.3-million-SF contraction in 2020. In contrast to the Covid office downturn, Orange County office tenants shed 4.5
DEMAND IMPROVES BUT DELTA SOWS CAUTIONOffice demand resumed in most of the county in the third quarter amid an economy straining to return to pre-pandemic normalcy, but tenants continued to shed blocks of space in the county’s largest market around John Wayne Airport.Nearly 540,000 SF of Q3 growth was reported in the North, Central and South County markets, which total 64.1 million SF. South County posted 318,539 SF of net absorption, its strongest quarter in more than three years.But the 43.6-million-SF Airport market,
VACANCY HITS NEW LOW ON RED-HOT DEMANDIndustrial users leased 1.8 million SF of space in the third quarter. It was the most three-month net absorption in 17 years. The strong tenant expansion also drove down the vacancy rate to an all-time low.The intensified demand reflects national trends. Businesses are reacting to pandemic-fueled e-commerce growth along with disruptions at several points in the global supply chain, affecting everything from raw materials to finished goods. Locally, a growing armada of as many as 80 cargo
MARKET IMPROVES ON VACCINES, ECONOMIC NEWSWith encouraging economic news and an effective vaccination campaign that dramatically reduced infections, the office market showed hints of stabilization as companies hold to their plans for post-Covid office re-openings in the third quarter.Second-quarter net absorption was negative 169,466 SF, a significant improvement from the negative 2.3-million-SF total of the previous three quarters. But for the new space included in the 117.4-million-SF inventory in Q2, net growth would be in the black. Four buildings totaling 218,513 SF were
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