Q4 2022 Industrial Market Outlook – Orange County
The industrial market in the Orange County saw vacant space drop to a record low in Q4 2022 as supply chain issues began to get sorted out together with warehouse demand for cargo coming from the ports of Los Angeles and Long Beach. The vacancy rate for industrial space decreased 50 basis points year over year to 1.9 percent as close to 1 million square feet of completed construction was added to the market since the start of the year. Completed construction more than doubled from last year while vacant industrial space decreased 24.1 percent and the average asking rent increased 27.9 percent to $1.56 per square foot triple net. With demand for warehouses still robust and rents rising, developers continued building new projects to meet demand. More than to 3.5 million square feet of industrial space remained under construction at year end.
TRENDS TO WATCH
In Orange County demand for industrial space outpaced supply for years as strong rent and sale price growth rates finally drove development in 2022. With construction improving the availability of industrial space, the added supply will elevate the challenge for tenants looking to occupy industrial space in the region and provide more opportunity.