North OC Industrial Market Gets Supply Boost
A new four-building, 232,000-sqaure-foot industrial project is coming to the notoriously supply-constrained North Orange County market.
“Industrial development is a challenge in Orange County due to the lack of land availability,” Chris Migliori, EVP at Daum Commercial who brokered the land sale and will serve as the exclusive leasing agent at the property. “The few remaining sites that do become available are often developed into other uses, such as residential. Through taking advantage of the rare opportunity to acquire a 10-acre land parcel, Panattoni is now able to strategically deliver four industrial buildings between 40,000 and 70,000 square feet, the size range posting the lowest vacancies.”
Industrial supply is tight in general in the Orange County market, but the North Orange County area is particularly tight because of its central location and access to freeway systems. “Demand is outpacing supply for industrial in Orange County, with the average vacancy rate at just 1.5% and asking rental rates increasing in the 5-to-6% range year-over-year,” says Migliori. “The North County region, which has traditionally been the county’s tightest submarket for industrial, remains in high-demand and is seeing the county’s lowest vacancy rates at just above 1%. This is due in part to its prime location that offers easy access to Interstate 5, State Routes 91, 57, 55.”
While the project has just broken ground, Migliori has already gotten interest from several potential tenants. “Orange County has a diverse mix of institutional corporations and privately owned businesses,” he adds. “The real marketing has just commenced and so far we have talked to a variety of different users. As an example, industries such as aerospace, automotive, manufacturing, apparel, food preparation, distribution, ceramics, flooring, construction and biomedical companies.”
As a result of the early interest, the team expects to see above-market rents on the project. “Only 1% of the total industrial inventory in Orange County is considered class-A,” says Migliori. “If a corporation is considering an expansion and desires 30’ clear height, docks and a private secured concrete yard, the true options are limited in all of Orange County. This project will attract companies seeking a Corporate Headquarters with all of the amenities.”
The final product will be a state-of-the-art class-A facility with two stories of executive office space, 30-foot minimum warehouse clearance, ESFR sprinkler systems, both dock-high and grade-level loading and fully secured concrete truck courts.