Orange County industrial real estate market reports
Q1 2025
Since 2023, demand for industrial space in Orange County has been slowing, with vacancy rates climbing to 7.9% in Q1 2025. Occupiers continue to shift their focus from expansion to consolidation and efficiency, as reduced consumer demand has lowered the need for excess inventory storage. In response, landlords have lowered rents to $1.56/SF. Looking ahead, vacancies are expected to remain elevated as 2.4M SF of new construction approaches delivery, with 85% still unleased. On the sales side, the market remains active, with Q1 2025 sales reaching $333M—double the previous quarter’s total—at an average price of $333/SF.
Net absorption
Absorption levels remained negative again, with a net absorption of -320K SF. However, North County remains a sought-after submarket, showing a positive absorption of 304K SF.
Asking rates
Average asking rental rates have moderated to $1.56/SF. To attract occupiers and close deals, owners and landlords continue to offer favorable abatements.
Vacancies
Vacancy rates have risen to 7.9% in Q1 2025, driven by occupiers prioritizing efficiency and becoming more selective in their space requirements.
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