One trend to note, according to Holdner, is the increase in construction. Total space under construction came in at just over 1.8 million square feet for the fourth quarter of 2015. Most of the current construction is occurring in the Irvine Spectrum submarket, 1.7 million square feet. "We should see an increase in construction in the coming quarters, as typically the cranes come out when vacancy dips below 12%."

As 2015 came to an end, direct/sublease space (unoccupied) finished the year at 10.78%, a decrease from the previous year's rate of 11.5% and significantly down from both the recession peak of nearly 18% in the third quarter of 2010 and the market high of 23% recorded in 1990.

Holdner notes "We are continuing to see a decrease in the amount of vacant and available space on the market, even with new product being delivered. As we progress into 2016, positive absorption and higher occupancy costs should continue, new deliveries in the southern half of the county may apply upward pressure on vacancy, and the market will further improve."

Vacancy and Availability in Industrial Market Reach Pre-Recession Levels

The Orange County industrial market took significant strides toward continued improvement in 2015 with significant positive absorption for the year, a six-cent or 9.5% increase in asking lease rates, and significant drops in both vacancy and availability.

"Overall in the Orange County industrial market over the last three years, vacancy has reduced 37% while availability has decreased 23.2%," says Holdner. "The substantial decreases in vacancy and availability are contributing to the gains in asking lease rates and sale prices."

Both vacancy and availability continued trending downward throughout 2015. Vacancy ended the fourth quarter of 2015 at 2.33%, the lowest rate ever recorded and a drop of over 23.5% from 2014's fourth quarter. Likewise, availability posted a rate of 4.47% at the close of the year, the lowest rate in nearly ten years, and a decrease of almost 17% from 2014. The record low rate recorded for availability was 4.29% in the fourth quarter of 2005.

As lease rates rise, sale prices are also ticking up, notes Holdner, who attributes this trend to the diminishing supply of industrial product for sale in Orange County, particularly in buildings smaller than 100,000 square feet.

"Currently, only around one percent of the inventory in the Orange County industrial market is available for sale. This lack of supply will continue to place upward pressure on pricing going forward," he explains.

"Overall, it's a great time to be a seller, but we continue to be cautiously optimistic about the Orange County market," says Holdner. "We continue to see improvement in both the office and industrial markets, and we anticipate positive gains moving forward, provided job creation continues."