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ORANGE COUNTY INDUSTRIAL VACANCY RISES TO 4-YEAR HIGH TO BEGIN 2009
The first three months of 2009 saw the Orange County industrial market’s vacancy rate jump to a four-year high of 4.9% as the problems in the global economy continue to have a detrimental impact upon the area’s industrial market. While vacancy still remains below 5%, the availability rate of 10.7% means more industrial space is now on the market than at anytime in the last several years. As this available space sits longer on the market and eventually rolls over vacant, vacancy rates are expected to rise to over 6% by year-end.
Weighted average asking rental rates decreased for the second consecutive quarter from $0.75 per square foot per month Triple Net (NNN) at year-end 2008 to $0.72 per square foot per month NNN in Q1. Although average asking rents remained flat for most of 2008, it now appears that industrial rents are dropping market-wide.
Sales and leasing activity remained at a low level with only 2.1 million SF while many manufacturing firms and distributors in the market for space chose to downsize in order to restrain costs. Since average asking rental rates and average sales prices PSF are decreasing from year-end 2008, the Orange County industrial market enters 2009 firmly in recession. However, for many industrial users who are looking for space, 2009 provides some of the best opportunities within the Greater Los Angeles Basin to lock in under-market rents for the long-term.
Contact Michael Soto at 213.532.3220 for more information.
  INDOC09Q1.pdf
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