Orange County Industrial Market Report Q1 2017
Demand Slows In Q1 But Rents Still Soaring
Net absorption experienced a significant downturn during the first quarter, marking its worst three-month performance in seven years. Despite this slowdown, the market maintained exceptionally tight conditions. Vacancy rates stayed at historically low levels, and rental growth remained robust throughout the period.
The momentum underlying Orange County's industrial sector became evident through substantial rent increases. Over the preceding two quarters, average rents had "jumped an average of 16 percent," reflecting strong landlord pricing power despite the absorption decline.
The quarter saw considerable space returned to the market, with 682,036 square feet becoming available for lease. This represents a notable shift after extended periods of net positive absorption.