Industrial Market Approaches Record

ANAHEIM, CA-The average asking lease rate for industrial space in Orange County inched its way in 2005 to within a penny of the all-time high that was set in late 2000, according to a year-end report by Voit Commercial Brokerage. The report, by Voit VP and research chief Jerry Holdner, says that the average asking leasing rate for industrial space in the county rose to 61 cents per sf per month, triple-net.That compares with a rate of 62 cents per sf per month, triple net, that the market achieved in the fourth quarter of 2000 and again in the first quarter of 2001. The year-end 2005 rate represents an increase of 5.17% from the average asking rate at the end of 2004.Holdner reports that the industrial vacancy rate dipped to 3.43% in the fourth quarter, nearly 20% lower than it was a year ago, while total availability declined nearly 18% to 5.13%. "This will put more pressure on lease rates to continue to climb in 2006," Holdner says.The total of all sales and leasing activity slipped to 15 million sf in 2005 compared with almost 18 million sf in 2004, which the Voit report attributed to a lack of available product. Developers were building slightly more than 750,000 sf of new space in the fourth quarter, up more than 5.2% from the amount under construction a year ago.The county absorbed 1.9 million sf of space throughout the year, bringing the total of absorption for the past three years to more than nine million sf. The average asking selling price was $129.17 per sf during the last quarter of the year, an increase of almost 16% over the past year.