Orange County Industry Space Demand Declines : Building Vacancies Shrink, Higher Land Costs Cited as Reason for More Lucrative Office Development
A total of 3.5 million square feet of industrial space was sold or leased in Orange County during the first three months of this year, well below the 4.4 million square feet for the first quarter of 1987, according to a study by Grubb & Ellis Commercial Brokerage Services.
First-quarter vacancy rates for industrial space in the county dropped from 15% in the first quarter of 1987 to 11% for the same period this year, representing 9.3 million square feet vacant from an overall base of 82 million square feet.
“The scarcity of industrial space can be attributed to the rising cost of land in most areas of Orange County,†according to George S. Spragins of the firm’s Newport Beach office. “With such high land costs, developers are finding it more lucrative to develop office projects that can command higher rents.â€
Vacancy rates among the five submarkets in the county were lowest in South County at 6% and highest in North County at 13%, the study showed.
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