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RECESSION SLOWS ORANGE COUNTY OFFICE MARKET IN 1991, REPORT REVEALS

RECESSION SLOWS ORANGE COUNTY OFFICE MARKET IN 1991, REPORT REVEALS
 NEWPORT BEACH, Calif., Jan. 9 /PRNewswire/ -- The recession took its toll on the Orange County office market in 1991 with net absorption down from a year ago, however, the vacancy rate also fell with construction at its lowest level in years, according to a year- end report released by Grubb & Ellis Commercial Real Estate Services.
 The vacancy rate stood at 21.6 percent as 1991 ended, down more than a full percentage point from 1990's year-end total of 22.7 percent, the study said.
 The amount of office space under construction in Orange County plummented in 1991. As the year ended, there was just 79,000 square feet of new office space under construction, compared to 2.1 million square feet a year ago.
 "With no new office projects slated to break ground in 1992 and so little space currently under construction, vacancies will continue to drop, despite the fact that absorption will be below what we saw in the 1980s," said Jack McNutt, office properties specialist with Grubb & Ellis' Newport Beach office."
 There was 1.4 million square feet of office space absorbed in Orange County in 1991, down from the 2.4 million square feet absorbed in 1990, the report said.
 "We won't see net absorption really pick up until companies start growing again and that won't happen until the overall economy improves," said McNutt. "In the meantime, we'll continue to see activity as firms makes lateral moves to take advantage of favorable rental rates and/or upgrade their image."
 Among the submarkets in Orange County, the Airport Area had the highest net absorption in 1991 with 731,588 square feet and posted a vacancy rate of 22.5 percent, the study noted.
 Contributing to the Airport Area's absorption was healthy leasing activity in the four new office buildings completed in 1991. Those projects were Birtcher's Lake Shore Towers, The Irvine Co.'s Jamboree Center Phase III, Bramalea's Bay View and Segerstrom's Plaza Tower.
 North County posted Orange County's lowest vacancy rate, 18.2 percent, as well as 241,189 square feet of positive absorption, the report said.
 The vacancy rate in Central County stood at 20.6 percent as the year ended, while that submarket recorded 156,185 square feet of absorption.
 "The vacancy rate in Central County is deceptive," said Lonnie Riddle, senior marketing consultant with Grubb & Ellis' Anaheim office. "The majority of that space is in older, second-generation product. Tenants looking for space in Class 'A' buildings in Central County are looking at a vacancy rate of just 9 percent."
 South Orange County absorbed 129,251 square feet of office space in 1991, while vacancies stood at 24.1 percent as the year ended, the highest of any Orange County submarket.
 South County was the only submarket with any new office space under construction, two buildings totaling 79,000 square feet.
 -0- 1/9/92
 /CONTACT: Sharon Abar of Grubb & Ellis, 714-937-0881/ CO: Grubb & Ellis Commercial Real Estate Services ST: California IN: FIN SU:


CH -- LA019 -- 8236 01/09/92 12:55 EST
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Date:Jan 9, 1992
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