NEWPORT BEACH, CA—Developers understand the need for industrial facilities with greater-than-32-foot clear heights and will continue to build as much as they can because of the very strong demand, but only about 7% of current stock is classified as class-A in the Orange County market, CBRE's senior managing director Kurt Strasmann tells GlobeSt.com. According to a recent report from the firm, only 6% of the warehouse inventory in Orange County offers 32-foot or above clear heights, ranking the market 26^th out of industrial markets in the country.

We spoke with Strasmann about this finding and what it means for the Orange County warehouse market.

GlobeSt.com: Why does Orange County have very little industrial inventory that meets modern clear-height needs?

Strasmann: One of the things to remember is that a large portion of the industrial inventory stock was built 30 years ago, when small manufacturing dominated the uses in OC. These buildings ranged in the 10,000-square-foot to 50,000-square-foot range and were designed for the use of that time: manufacturing. Typically, the buildings were ground level with lower clearance (18 feet to 24 feet). OC has not had a large inventory of class-A facilities (32-foot clear and above with good truck loading). Our research shows only about 7% of the current inventory stock is classified as class A.

GlobeSt.com: What, if anything, is the market doing to remedy this?

Strasmann: Well, it's in process, with most all new developments being designed as state-of-the-art facilities for today's users' needs. Unfortunately, OC is an infill location, so we don't see as many opportunities for new developments or repositions as the Inland Empire, where two-thirds of the industrial inventory is class-A product. Within OC, the North Orange County market has been the biggest beneficiary of new developments. One excellent example is known as the Concourse, which sold last year for record pricing.

GlobeSt.com: Is this something Orange County needs to worry in terms of meeting market demand?

Strasmann: No, the county has the second-lowest vacancy rate in the nation at 1.5%. We have a severe shortage of industrial facilities and excellent demand from users. We do not see any fundamentals that would change the current very strong market.

GlobeSt.com: What else should our readers know about the new industrial clear heights and the Orange County market?

Strasmann: The trend will continue when development opportunities present themselves. Developers understand the need for this type of facility and will continue to build as much as they can because of the very strong demand. In some markets, we are seeing new developments with up to 40-foot clear heights in anticipation of potential new and more-efficient technologies that will allow users to increase their cubic capacity within the building.

We spoke with Strasmann about this finding and what it means for the Orange County warehouse market.

GlobeSt.com: Why does Orange County have very little industrial inventory that meets modern clear-height needs?

GlobeSt.com: What, if anything, is the market doing to remedy this?

GlobeSt.com: Is this something Orange County needs to worry in terms of meeting market demand?

GlobeSt.com: What else should our readers know about the new industrial clear heights and the Orange County market?

Instant Insights /

Is OC's Lack of 32-Ft. Clear Heights a Problem?

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