"It's steady as she goes," states Jerry Holdner, Voit's vice president of market research. "The market's kind of flat, but it's not unhealthy. We're still at a record low vacancy rate, and while it's above last year, anything above 5% is phenomenal."

The lowest vacancy rate in the county, 3.68%, can be found in North Orange County, the largest submarket in the county with 46% of all the county's industrial buildings.

Activity in the second quarter recovered from a dismal first quarter, climbing to 3.3 million sf from 2.5 million sf in the first quarter, the former moving toward a more normal environment, Holdner says.

"Over the past eight years activity has averaged about 4 million sf per quarter, but it hasn't been above that mark since the first quarter of 2005," Holdner says.The average asking triple net lease rate is .80 cents per sf per month, an increase of 6.67% from a year ago and the same quarter. Asking lease rates are expected to remain at current levels for a while, and like free rent and tenant improvement allowances should continue to increase in the short run, the report states.

"Granted activity has been slow, but we're still at record-high asking lease rates here in Orange County," Holdner says.

The average asking selling price is $166.36 per sf this quarter, down slightly from last quarter's $173.61, caused by what Holdner points to as "a disconnect between buyers and sellers," which he says could create more downward pressure on pricing if the inventory of for-sale buildings rises.

"Asking prices have come down a bit, because of how difficult it is to borrow money right now," he adds.

On a good note, "as prices drop, the market's kind of correcting itself from being overheated," he says. "Certainly if you're looking at buying, now's the time to look."Net absorption for the county during the second quarter of 2008 was a positive 2,653 sf, giving the market 564,121 sf of total negative absorption for 2008.

"I feel that were at bottom," Holdner says, "and it's just a matter of how long we're going to be here."