Laserfiche WebLink
Construction <br />> New construction in the Airport Area and South County <br />submarkets totaled 502,500 square feet. The 348,800 <br />square foot first phase of Spectrum Terrance in South County <br />delivered half vacancy to the market during the third quarter. <br />> Two office projects are currently under construction. The <br />Press in Costa Mesa is under renovation (432,500 square <br />feet), and The Source H2O in Irvine (70,000 square feet) is <br />also underway. Both projects are expected to deliver at year <br />end. <br />> FORECAST: Approximately 800,000 square feet of <br />proposed office product is expected to start construction <br />within the next year. <br />Investment Trends <br />> Investment activity grew for properties greater than 25,000 <br />square feet compared to one quarter ago, totaling $426.7 <br />million in transaction value. Transaction value increased by <br />14.7% from the previous quarter. <br />> The largest investment sale recorded during the third <br />quarter was 4 Hutton Centre Drive in Santa Ana. The 216,900 <br />squre foot property was acquired by LaSalle Investment <br />Management for $55.4 million ($255 PSF). <br />> FORECAST: Anticipated drops in borrowing rates will likely <br />spur investors off the sidelines and into possible different <br />product type assets. Real estate remains an attractive <br />investment opportunity for long term investors. <br />Outlook <br />Although third quarter saw a slowdown in market activity, <br />the Orange County market is expected to maintain positive <br />momentum as the local economy remains strong. As new <br />inventory delivers to the market at year end and tenants <br />continue to make space efficient real estate decisions, <br />absorption gains are expected to be limited in the coming <br />quarters. However, positive demand will still be seen by <br />coworking companies as they continue to expand their <br />footprints. Orange County will remain a highly desirable <br />market for traditional FIRE tenants as well as technology and <br />manufacturing users. <br />Historical Net Absorption & Construction Completions <br />O.C. Office Market 03 '15-'19 <br />1.500.000 <br />1,000,000 <br />t <br />5001000 <br />a <br />0 <br />o <br />(500,000) <br />(1,000.000) <br />3015 3016 <br />Investment Trends Chart <br />O.C. Office Market 2011-2019 <br />$3%.00 <br />$300.00 <br />$2%A0 <br />S2WJD0 <br />$1%.00 <br />$1%A0 <br />$50.00 <br />$0A0 <br />3017 3018 3019 <br />2012 2013 2014 20n 2016 2017 20M 2019 <br />�$/a5F —QPW <br />Unemployment Rate I U.S., C.A. & O.C. I August 2019 <br />4.5% <br />4.0% <br />3.5% <br />3.0% <br />25% <br />2.0% <br />1.5% <br />1.0% <br />0.5% <br />0.0% <br />UnRed Sates Califomla Orange County <br />7.0% <br />65% <br />6A% <br />53% <br />5.0% <br />45% <br />4.0% <br />7 <br />