More than 1.1 million square feet of Orange County’s previously uninhabited industrial space has been leased during the second quarter of 2011, according to the 2011 Second Quarter Market Report by Newport Beach-based Voit Real Estate Services. The Orange County office market followed similar a pattern, with nearly half a million square feet of empty office space that has been leased during the same time period, according to the report. The 1.6 million square-footage total is seen as encouraging news.
“Over the past five quarters, from 2Q 2010 through 2Q 2011, the Orange County industrial market has posted a total of almost 3.3 million square feet of positive net absorption,” said Jerry Holdner, vice president of research at Voit. “This is even greater than the previous positive streak seen during the peak of the market, from 4Q 2006 through 4Q 2007, which totaled only 2.3 million square feet.”
As occupancy increases in the industry and office markets, signs of a decrease in availability and vacancy are evident. This is an indication that the markets may be growing. While lease rates have started to stabilize, industrial market sales prices have shown its first growth in nearly two years. These figures are showing to be promising for the O.C. markets.
“Consistent, ‘positive absorption’ (referring to uninhabited space that has been filled by companies) for both the industrial and office market is significant news,” said Holdner. “Thus far in 2011, the Orange County industrial market’s net occupancy has increased by more than 1.5 million square feet, while the office market has increased by nearly 900,000 square feet. These numbers are a clear indication that the Orange County market is strengthening.”
Voit reported a rise in the vacancy percentages in both O.C.’s industrial and office markets. The 2011 Q2 industrial space vacancy rate is at 5.13 percent, down from the 6.12 percent at same time period last year. The office space vacancy percentage dropped from 18.00 percent in 2010 Q2 to 16.42 percent this year.
“Orange County is a very resilient market, and the [overall] increase in occupancy means the market is stabilizing,” said Holdner.
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