Market Reports Q1 2018
Industrial Market
The industrial sector shows exceptional tightness. County vacancy has compressed to 2.4%, with only roughly 450 spaces available across 8,310 buildings encompassing 276.9 million square feet. "Much of the available space is functionally obsolete and unsuitable for most users," according to the report. Direct rents climbed 10.2% year-over-year, signaling continued upward pressure as supply severely constrains options for expanding companies.
Office Market
Office dynamics paint a starkly different picture. Despite posting its third consecutive quarterly demand gain, absorption turned negative by 253,297 square feet in Q1. The Airport submarket—representing 38% of countywide inventory—has softened considerably, releasing over 780,000 square feet. South County captured 72% of leasing activity over nine quarters, yet new supply has outpaced absorption there. Landlords have begun offering "leasing bonuses to procuring brokers," typically a downturn signal.
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Contact:
Justin B. Smith
949.790.3151
jbsmith@leeirvine.com