Hot Industrial and Office Means High Rates... and More
A steady increase in industrial leases in Orange County and difficult development means there just aren't that many sites for industrial, leading to a supply shortfall, JLL Orange County’s Matt Christensen tells us. That’s driving up purchase prices and lease rates, so large industrial space users, especially those looking to expand, are making deals to lock in rates as fast as they can. (It's like how everyone hoarded incandescent bulbs before they were outlawed... or was that just us?)
Recently Matt repped Goodwill Industries of Orange County in a lease expansion for 37k SF of industrial space at 2250 S Yale St in Santa Ana, bringing its total space to more than 72k Sf for its e-commerce and retail warehousing. After studying the market, Goodwill decided that expanding its operations at 2250 S Yale was its best option, Matt says. CBRE repped the landlord, Skeffington Enterprises, in the deal.
The OC office market is cooking, too. The county added nearly 27,000 jobs in Q2 alone, JLL reports, with the construction sector leading the way. Even more positive: OC saw 1.1M SF of office absorption during the second quarter, the highest amount since 2005 (one of those hard-to-remember pre-recession years). Rents are rising, and investors have taken note: This week, RREEF Property Trust inked a deal to buy the 73k SF Anaheim Hills Office Plaza for more than $18M. According to RREEF chairman Todd Henderson, the investor not only liked the property because it's one of the newest in north OC (finished in '08), but also because RREEF will be able to grow NOI as the sector continues to heat up.