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ORANGE COUNTY INDUSTRIAL MARKET PICKS UP IN THIRD QUARTER, REPORT REVEALS

 ORANGE COUNTY INDUSTRIAL MARKET PICKS UP
 IN THIRD QUARTER, REPORT REVEALS
 ORANGE, Calif., Oct. 10 /PRNewswire/ -- Demand for Orange County research and development buildings as well as manufacturing/distribution space picked up in the third quarter of 1991, according to a report released today by Grubb & Ellis Commercial Real Estate Services.
 In the research and development category, 1,058,245 square feet of space was sold or leased during the third quarter of 1991, up from the 995,086 square feet of sales and leasing activity posted for the same period a year ago, the study said.
 However, on a year-to-date basis, 2.9 million square feet of sales and leasing activity was recorded for the first nine months of 1991, down from 1990's year-to-date total of 3.5 million square feet, the report noted.
 The majority of sales and leasing activity was in the airport area, which had 515,324 square feet of R&D space leased or sold during the third quarter, followed by south county with 256,655 square feet.
 "The tenant market has become more active in south county," said John Saunders, industrial properties specialist with Grubb & Ellis' south Orange County office. "A year ago, tenants looking for a building with freeway frontage had five projects to choose from in the Irvine Spectrum. Now their choices are down to one or two and the rental rates are higher."
 Vacancies in the research and development category stood at 17.2 percent as the third quarter ended, up from 15.8 percent posted for the same period a year ago.
 Vacancies ranged from a high of 23.7 percent in south county to a low 9.04 percent in west county, the report said.
 "With virtually no new construction, we expect to see vacancy rates dropping and lease rates tightening, especially in south county," said Saunders.
 The amount of research and development space under construction in Orange County continued to plummet with 158,564 square feet under construction as the third quarter ended, down from the 553,435 square feet under construction during the third quarter a year ago.
 Only two submarkets had R&D space under construction in the third quarter; the airport area with 52,037 square feet and south county with 106,527 square feet. There was no new R&D construction in north or central county. R&D construction peaked in Orange County in 1986 at almost 2.5 million square feet.
 The standard industrial market continued to perform well, despite the sluggish economy. Some 3.1 million square feet of manufacturing/distribution space was sold or leased in the third quarter, up from 1990's third quarter total of 2.8 million square feet, the report said.
 And on a year-to-date basis, 8.4 million square feet of standard industrial space had been sold or leased in Orange County, down slightly from 1990's nine-month total of 8.5 million square feet.
 Leading the county in sales and leasing activity was the airport area with 1,131,582 square feet, followed by south county with 741,118 square feet, north county with 529,034 square feet and central county with 470,248 feet.
 "In the recent past, tenants have considered relocating from the airport area to central and north Orange County to achieve lower lease rates," said David Knowlton, industrial properties specialist with Grubb & Ellis' Anaheim office. "However, today, lease rates in the airport area have matched central and north Orange County rates."
 Vacancies in the standard industrial market stood at 17.5 percent as the third quarter ended, up from the 13.9 percent posted for the same period a year ago.
 Vacancies for individual submarkets were airport area, 22.3 percent; south county, 20.3 percent; central county, 12.2 percent; north county, 16.3 percent and west county, 17.4 percent.
 Construction levels continued to fall throughout the county with just 324,874 square feet of manufacturing/distribution space under construction during the third quarter. A year ago that figure stood at 835,241 square feet, while in 1987 there was more than 2 million square feet of standard industrial space under construction in Orange County.
 The majority of new construction was in central county, which accounted for 242,079 square feet of that total. The only other submarkets with new industrial space under construction were north county with 70,000 square feet and west county with 12,795 square feet.
 -0- 10/10/91 R
 /CONTACT: Sharon Abar of Grubb & Ellis, 714-937-0881/ CO: Grubb & Ellis Commercial Real Estate Service ST: California IN: SU:


KD -- LA012 -- 1058 12/10/91 13:45 EST
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Publication:PR Newswire
Date:Dec 10, 1991
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