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ORANGE COUNTY, CA-Orange County ranks as the market with the second-lowest expected 2013 industrial vacancy rate in the country, according to Marcus & Millichap. Second to Houston, Orange County joins several other western markets with low expected vacancy rates, including Los Angeles, Seattle-Tacoma, Salt Lake City, Riverside-San Bernardino, Denver and Portland, the firm reports.
Year-end 2012 industrial vacancy for Orange County was 6%, and year-end 2013 vacancy for the region is expected to reach 4.9%, the firm reports. Houston's year-end industrial vacancy for 2012 was 4.9% and is expected to reach 4.8% by year-end 2013.
Exceptional demand exists for modern class-A bulk warehouse facilities in markets with proximity to major ports, linkages to intermodal transportation hubs and access to air cargo nodes, according to M&M. Brisk leasing and build-to-suit activity ties directly to or indirectly to port-related activities in many of the top-ranked markets including L.A. and Seattle-Tacoma.
Industrial markets like Denver also benefit from strong ties to the energy sector and low levels of speculative new supply, the firm adds. Orange County held steady during the first half of 2013, stabilized by a diverse range of expanding small- to mid-sized companies.
As GlobeSt.com reported in August, by studying the age of various commercial real estate buildings in Orange County and the decades in which they were built, Jones Lang LaSalle has discovered that construction of industrial buildings has decreased dramatically since the 1970s. One reason for this decline in industrial development has been the giving way of industrial buildings to higher and better uses, Zach Niles, SVP industrial real estate advisory and brokerage operations for JLL, tells GlobeSt.com.
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