Orange County industrial real estate market reports
Ecommerce, manufacturing, and biotech have all seen demand increase during the pandemic. As these sectors continue to drive the recovery, the industrial sector in Orange County is positioned to benefit. Orange County industrial real estate fundamentals will remain strong into the second half of the year as rental rates continue to be driven by strengthening leasing activity and tightening vacancies. Amazon made a push in Southern California increasing the number of delivery hubs in the past few years, Orange County benefiting greatly.
Orange County industrial market
- The overall vacancy rate for the Orange County industrial market continues to decrease with vacancy at 3.1%, down from 3.7% in 2020.
- Port volume traffic has increased 44.0 percent compared to the same period last year.
- Overall leasing activity has been sustained throughout the pandemic, currently sitting at 21.2 percent of the long-term annual average of the last 20 years of historical data.
- Net absorption through mid-year is recovering post Covid. At over 500,000 sf through the first half of the year, aggregate 2021 net absorption could equal or exceed the total net absorption of last year.
Rental pricing trends
- Asking rents have increased by 8.9 percent since the start of the pandemic and have continued a steady upward trajectory since 2015.
- Asking rents continued to rise in the second quarter, and overall have been trending upward since 2015, increasing by 55.6 percent over the last six years.
- Orange County industrial investment activity surged to $2.6 Billion since 2020 as investors are attracted to the sector fundamentals largely benefited from the COVID environment.
- Investors continue capital deployment on industrial assets at a rate that is 37.0 percent higher than the prior five-year average.
- A push for increased vaccination rates have allowed for greater reopening efforts, enabling the Orange County unemployment rate to rebound from a high of 14.9 percent in May 2020 to 5.9 percent in May 2021.
- The Orange County metro area lost 4.5 percent of industrial employment since the pandemic began, as evidenced by a sharp decline in jobs early in 2020. All areas of the industrial sector saw losses since the pandemic but recent preliminary data hint at a recovery beginning coinciding with increased vaccinations and looser restrictions and reopening of the state.
- The Orange County metropolitan area began to reopen in the second quarter, as vaccination rates surpassed the national average to 50.4 percent.
- As office workers across the metropolitan area just now begin to return to the office, the trade transportation and utilities sector has grown by 6.8 percent from the same period a year ago.
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