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DEMAND FOR ORANGE COUNTY INDUSTRIAL SPACE SLOWS IN FIRST QUARTER, REPORT REVEALS

 DEMAND FOR ORANGE COUNTY INDUSTRIAL SPACE
 SLOWS IN FIRST QUARTER, REPORT REVEALS
 ORANGE, Calif., April 9 /PRNewswire/ -- A sluggish economy slowed demand for Orange County industrial space during the first quarter of 1992, according to a report released today by Grubb & Els? Commercial Real Estate Services.
 In the manufacturing/distribution category, 2.0 million square feet of industrial space was sold or leased in the first quarter of 1992, down from 2.8 million square feet for the same period a year ago.
 "The drop in sales and leasing activity reflects the economy and loss of jobs in Orange County," said Bryon Ward, vice president with Grubb & Ellis' Newport Beach office. "However, we're looking forward to an improved second quarter as the economy turns around."
 Sales activity is at its highest in two years, the study noted, with approximately 880,000 square feet of standard industrial space sold in Orange County in the first quarter.
 "Users are buying because they feel optimistic about their business and about Orange County's long-term prospects," said Jim Cunningham, industrial properties specialist with Grubb & Ellis' South Orange County office. "They also recognize a good opportunity with sales prices having dropped and interest rates at an all-time low."
 In the submarkets, North County recorded 695,647 square feet of sales and leasing activity in the first quarter, followed by West County with 487,880 square feet, the Airport Area with 473,051 square feet and South County with 136,840 square feet.
 "The feeling among users is that we're close to the bottom of the cycle, both in terms of the economy and rental rates," said Art Holland, industrial properties specialist with Grubb & Ellis' Anaheim office. "Tenants are moving more quickly because they feel the window of opportunity is closing for them to make aggressive deals."
 The vacancy rate for standard industrial space stood at 18.7 percent as the first quarter ended, up from 16.6 percent for the same period a year ago. Vacancies ranged from a high of 24.0 percent in South County to lows of 16.6 percent in North County and 16.9 percent in Central County.
 There was 116,000 square feet of manufacturing/distribution space under construction in Orange County in the first quarter, all in one project in Fullerton. A year ago, there was 248,154 square feet of standard industrial space under construction countywide.
 In the research and development category, 731,157 square feet of space was sold or leased in the first quarter, up from the 688,021 square feet of sales and leasing activity posted for the same period a year ago.
 The Airport Area led the region in activity with 199,108 square feet of research and development space sold or leased in the first quarter.
 Activity among the remaining submarkets was North County, 143,894 square feet; South County, 136,896 square feet; Central County, 126,500 square feet; and West County, 124,759 square feet.
 The vacancy rate in the Orange County research and development market stood at 18.4 percent as the first quarter ended, up from the 17.4 percent posted for the same period a year ago.
 Vacancies ranged from a high of 23.7 percent in South County to a low of 11.2 percent in Central County. The remaining submarkets were in the middle of that range with the Airport Area posting 17.5 percent, North County, 18.2 percent and West County, 18.9 percent.
 The amount of R&D space under construction continued to fall with only 13,752 square feet of space under construction in Orange County in the first quarter, down from 299,307 square feet under construction a year ago.
 -0- 4/9/92
 /CONTACT: Sharon Abar of Grubb & Ellis, 714-937-0881/ CO: Grubb & Ellis Commercial Real Estate Services ST: California IN: FIN SU:


AL-CH -- LA015 -- 6790 04/09/92 12:59 EDT
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Date:Apr 9, 1992
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