Tishman Speyer, Mitsui Fudosan Plan OC Industrial Campus

The joint venture of Tishman Speyer and Mitsui Fudosan America (MFA) has acquired a fully entitled 32-acre site in Irvine where the partners plan to build a 600K SF industrial campus.

The joint venture is planning to build four industrial buildings ranging from 73K SF to 203K SF on the site, which sits in the southern part of Irvine’s Great Park Neighborhoods master plan area near the 5 Freeway.

In November 2022, Tishman Speyer and MFA launched what they called a Logistics Venture to pursue $500M in ground-up industrial development projects as well as the redevelopment of existing value-add industrial acquisitions.

The vacancy rate in the Orange County industrial market increased for the fourth consecutive quarter to 2.1% in the fourth quarter, up from 1.8% in the third quarter and 120 bps higher than the rate at the end of 2022, according to Colliers’ Q4 2023 market report.

Net absorption was negative at minus 619K SF in Q4, with net absorption for 2023 totaling minus 1.9M SF. More than half of the negative net absorption in Orange County was in the North submarket, which ended the year with a total of minus 1M SF.

Availability in the Orange County industrial market reached 4.2% in Q4, approaching 10M SF, a level not seen since Q1 2021. The year-to-date gross activity totaled 8.3M SF, a 19% drop from the end of 2022.

Average asking rents declined slightly to $1.74 per SF NNN, but they remain 7.4% higher than they were at the end of 2022.

More than 1.8M in new industrial construction is underway in Orange County, with nearly all of this new supply scheduled for delivery in H1 2024.

The projects scheduled to be completed in the first quarter include Dermody’s LogistiCenter at 55 Project, a 311K SF campus in Tustin; LBA Logistics’ 1215 Logistics Center, a 166K SF warehouse in Anaheim; the Prologis West Orange County Logistics Center, a 149K SF facility; Ares Management’s 136K SF warehouse in Irvine; and a 121K SF warehouse in Irvine being built by Alere Property Group.

“Over the past decade, Orange County’s industrial base has been shrinking as owners have opted for the redevelopment of industrial spaces into office or multifamily projects,” Colliers’ report said.

“Institutional development of industrial properties has been revitalized since the e-commerce boom and will continue to attract the redevelopment of aging properties,” the report said.