CORFAC News

ORANGE COUNTY, Calif., (JULY 07, 2011) – In the second quarter of 2011, Orange County’s industrial market posted nearly 1.1 million square feet of positive absorption- the highest figure seen since the fourth quarter of 2005, according to the Second Quarter Market Report from Voit Real Estate Services/CORFAC International. “Over the past five quarters, from 2Q10 through 2Q11, the Orange County industrial market has posted a total of almost 3.3 million square feet of positive net absorption,” said Jerry Holdner, Vice President of Research at Voit. “This is even greater than the previous positive streak seen during the peak of the market from 4Q06 through 4Q07, which totaled only 2.3 million square feet.”The Orange County office market also continued on its path of positive net absorption, posting almost a half million square feet in the second quarter of 2011.“Consistent, positive absorption for both the industrial and office market is significant news,” explained Holdner. “Thus far in 2011, the Orange County industrial market’s net occupancy has increased by more than 1.5 million square feet, while the office market has increased by nearly 900,000 square feet. These numbers are a clear indication that the Orange County market is strengthening.”Occupancy on the Rise in Orange County’s Industrial MarketOccupancy rose in the Orange County industrial market, as Voit reported a steady decline in both vacancy and availability. Vacancy came in at 5.13 percent in the second quarter of 2011, lower than the previous quarter’s rate of 5.58 percent and down more than 16 percent from 2010’s second quarter rate of 6.12 percent.“The change in vacancy has been rapid, with a decrease of more than half a percent in just one quarter. This demonstrates that deals are being completed and is a solid indication of positive growth in the market,” said Holdner. Voit reported an availability rate of 9.21 percent in the industrial market during the second quarter of 2011, a decrease from the previous quarter’s rate of 9.28 percent and nearly 15 percent lower than the 10.83 percent reported in the second quarter of 2010.Industrial sales and leasing activity for the Orange County market totaled 2.9 million square feet in the second quarter, a decrease from the previous quarter’s total. Lease rates appeared to have stabilized, with the market posting an average asking triple-net lease of $.52 per month per square foot for the second consecutive quarter. In addition, sale prices appeared to have hit a turning point, displaying an average sale price of $130.51 for the second quarter of 2011, the first increase seen in over two years.Vacancy Continues Downward Trend in Orange County Office MarketVoit reported that vacancy continued its descent in the Orange County office market, displaying a rate of 16.42 percent in the second quarter of 2011, down from the previous quarter’s rate of 16.83 and nearly nine percent lower than 2010’s second quarter posting of 18.00 percent.“Orange County is a very resilient market, and the increase in occupancy means the market is stabilizing,” said Holdner.The availability rate in Orange County’s office market also continued to decrease. Voit reported availability for the second quarter at 20.68 percent, down from the previous quarter’s rate of 20.72 percent and approximately 8.5 percent lower than 2010’s second quarter rate of 22.59 percent.Office sales and leasing activity for the Orange County market totaled 3.3 million square feet in the second quarter, a slight decrease from the previous quarter’s total.The average asking full-service lease rate in Orange County was $1.96 per month per square foot in the second quarter, three cents lower than the previous quarter and eleven cents lower than 2010’s second quarter rate of $2.07.“Lease rates are declining at a slower rate, which may lead to further stabilization of the office market as the year continues,” Holdner said. “We anticipate some growth in activity in the office market during the remainder of 2011.”Voit Real Estate Services is now a 10-office commercial real estate firm that, through its brokerage and asset services professionals working together, provides strategic property solutions tailored to clients’ needs. Combining 39 years of expertise in property management, investment advisory, financial analysis, market research, asset management, tenant advisory and brokerage services, Voit provides clients with forward looking strategies that create value for their assets and portfolios.Voit is a privately held, debt-free firm that has successfully navigated numerous market cycles since 1971 and currently employs more than 230 people. A member of CORFAC International, Voit has owned, developed and managed over 45 million square feet of commercial real estate, participated in $1.35 billion of construction projects and completed over $33 billion in brokerage transaction volume. Further information is available at www.voitco.com.