(Read more on the industrial market.)
ORANGE COUNTY, CA-The latest figures from Voit Commercial Brokerage show an industrial sector that remains steady, though not spectacular. According to the report, product under construction has dropped nearly in half from a year ago. Only 897,965 sf are under way compared to 1.6 million sf in Q3 2006.
That drop off is due in part to a lack of available land, according to Voit analysts. “The shrinking availability of land is only allowing for the development of primarily small, for-sale industrial buildings,” according to the report. “This lack of available land, coupled with the high land prices and rising construction costs, has lead to few mid-size buildings and distribution centers being developed in this infill market.”
Other numbers show a 4.07% vacancy rate, compared to 4.02% the same period a year ago. The tight market and lack of new product set to hit the market has driven up prices. The average asking rate stands at $.75 per sf. It stood at $.67 per sf at this time last year. The average asking sales rate has jumped from $150.89 per sf last year to $168.59 per sf now.
According to Voit, activity has remained strong in the area and that's been reflected by a number of recent deals. At Koll Center 3 Business Park in the Irvine Spectrum, roughly 25% of the for-sale units have been pre-sold. The units range from 1,100 sf to 29,000 sf at the $57-million, 188,000-sf business park, which totals 56 for-sale units.
The office and R&D park is the third in the area for Koll that targets smaller users. The first two developments totaled 324,000 sf. Koll Center 1 topped out in 2005, with Koll Center 2 rolling out this March.
According to Koll officials, the current project has experienced similar demand of the first two and has found a niche in the smaller design model. “The units in the latest project were specifically designed for smaller companies,” says Scott Meserve, development manager for the Koll Co.
Mike Hartel, Kevin Turner, Joe Winkelmann and Travis Haining of Voit Commercial Brokerage are the exclusive marketing agents for Koll Center Irvine.
In a deal in Northern Orange County, Sonette Inc., the maker of Flexfit, a popular type of hat, has acquired a 42,635-sf industrial facility for $5.5 million. A broker with Colliers International says the location of 2325 Raymer Ave., with its proximity to many action sports companies in the region, fit the buyer's needs.
Grace Yoon, associate vice president of Colliers International's Irvine office, says the space includes 4,386 sf of office space. Yoon, along with Brad Christian, also of Colliers International's Irvine office, represented the seller, Hana Financial. The Heger Co. represented Sonette Inc.
These latest deals are indicative of what to expect as we roll into 2008. According to Voit, “the industrial market will exhibit many similar characteristics of 2007, with limited space available for new development,” causing companies looking to enter or expand in Orange County relegated, in most cases, to leasing or investing in existing space.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
