Industrial Insights — Summer Leasing Update

01 · What actually signed

Executed Orange County comps, split by building size

Every report says Orange County industrial rent is off about 9% from the 2023 peak. That is accurate and close to useless, because almost nobody signs a lease at the countywide blended rate. Our comp book holds 2,088 Orange County industrial leases with confirmed terms going back to 2018, deals that actually signed rather than what buildings were asking. Split it by building size and it separates into two different markets.

Read the run up and the giveback as two different events. Under 10,000 SF is up 27% since 2020 and sits 3% off its peak. Space from 25,000 to 50,000 SF is up 30% since 2020 but 21% off its peak. The countywide 9% is an average of those and describes neither. The median Orange County lease signed at $1.20 in 2020 and $1.65 in 2023, so every band is still well above where it started. Compound what you signed at by the escalation in your own lease, compare it to today's market, and you get how far above market you are right now.

02 · What a renewal does to your rent

The same book, cut by the year you signed

If you signed in 2020 your rent is still below today's market, so a renewal takes it up. 2021 lands within a couple of points of market either way. If you signed at the 2022 or 2023 peak, today's market is up to 28% below what you are paying, and a renewal hands that back. We run the same size-band and vintage read wherever our offices hold executed data, which is most major industrial markets in the country. Tell me the building and the year you signed and I will run yours.

03 · What four companies said about the quarter

A global landlord, a Southern California landlord, the largest occupier, and the company selling them automation

04 · Now the part that matters more

That discount is being taken back

Imports peaked in July. Retailers pulled freight forward ahead of August tariffs, so every month into November is forecast below last year. On a chart that looks like weakness. It is not. The holidays are already stocked and the NRF still expects record sales above $1 trillion.

And the supply that would normally cap a recovery is not coming. Orange County has 715,803 SF under construction, a five-year low, seven buildings against 23 a year ago, about 0.25% of county inventory. Whatever space exists in 2027 is very close to the space that exists today.

So if your lease expires anywhere in 2027, any month, early or late, start now. Between August and October, ownership groups across the country build next year's operating budget, setting a rent and a concession assumption building by building. Once it is approved they are defending a number rather than discovering one. A renewal that starts before that budget is written is an input. The same conversation in February is a variance someone has to justify upward.

Everything that creates leverage, a credible alternative, a competing proposal, time to walk, takes months to build and cannot be manufactured in the last sixty days.