The lack of construction in Orange County is one of the main factors contributing to a stable industrial market, according to Jerry Holdner, vice president of market research for Voit. There were three million sf of space under construction in the second quarter of 2001, a 27% decrease from the second quarter of last year. "The slowdown in construction should keep supply in check," Holdner says. "I foresee the market staying pretty steady through the end of the year."

The industrial availability rate was at 6.59% for the second quarter of 2001. It is nearly the same as the second quarter of 2000, when the rate was 5.52%. However, rental rates have increased 15% since the second quarter of 2000, a sign that demand continues to outpace supply.