Orange County office space shows positive results in 2nd Quarter 2010ANAHEIM, Calif., (JULY 07, 2010) – For the first time in seven consecutive quarters, Orange County’s industrial market showed positive net absorption, posting 278,731 square feet, according to Voit Real Estate Services’ Second Quarter Market Report. Overall, availability is stabilizing and lease and sale transactions are on the rise – both signs that the industrial market is moving in a positive direction, according to Jerry Holdner, Vice President of Market Research for Voit.
In the Orange County office space market, net absorption continued to show signs of improvement as the amount of negative absorption entering the market per quarter lessened, indicating a trend in stabilization. The amount of square feet transacted in the second quarter of 2010 doubled since the previous quarter, averaging 2.8 million square feet per quarter, which indicates a positive direction for the office market.
Voit’s Second Quarter 2010 Industrial Market Report
The availability rate for the second quarter of 2010 was 10.72 percent – down almost 50 basis points from the previous quarter. “Although the vacancy rate is still rising as sublet space becomes considered vacant space, the overall climb has slowed significantly over the past three quarters,” Holdner said.
Industrial lease rates continued to decline, falling three cents over the previous quarter, making the average asking triple net lease rate per month, per square foot in Orange County $0.54.
“Lease and sales transactions, in terms of square footage, are up more than ten percent compared to last year – a sign that the industrial market is beginning to move in the right direction,” added Holdner. “We anticipate this uptick will continue in the third quarter.”
Voit’s Second Quarter 2010 Office Market Report
Availability displayed evidence of stabilization in the second quarter, with rates down almost 100 basis points from the previous quarter, and up only 66 basis points from last year. Vacancy increased to 18.30% over the prior quarter – a rise that can be attributed to unleased sublet space converting into direct vacant space.
“The amount of available product on the market peaked last quarter at 23.87% and has begun to decrease, with a rate of 22.96% this quarter. This decline in availability indicates that the market is beginning to readjust,” explained Holdner. Lease rates continued to drop, falling six cents over the previous quarter, making the average asking full-service gross lease rate per month per square foot in Orange County $2.06.
Lease and sale transactions posted 2.8 million square feet in the second quarter, double that of the previous quarter. “This is a clear sign that the office market is beginning to recover,” said Holdner.
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“Although net absorption for the county posted a negative 143,257 square feet this quarter, the number offers a positive insight into the market as overall negative absorption per quarter is slowing down,” he stated.
“As we continue through 2010, negative absorption has slowed, and the amount of available space on the market has decreased. Overall, the office market is showing gradual signs of stabilizing, and it would appear the worst is over,” according Kurt Strasmann, Managing Director of Voit’s Orange County brokerage offices.
Voit is a privately held, debt free firm that has successfully navigated through numerous market cycles since 1971, and currently employs 170 people. Voit has owned, developed and managed over 45 million square feet of commercial real estate, participated in $1.3 billion of construction projects and completed over $32 billion in brokerage transaction volume. Service offerings include property and association management, financial analysis, asset valuation, asset management, brokerage services, market research, environmental assessment, project management, development and construction management. Further information is available at www.voitco.com.
Judith Brower/Laura Figge
Brower, Miller & Cole