Orange County’s industrial vacancy rate is one of the lowest on the West Coast 1.9%, and the rate has averaged only 2.7% over the past five years. It is below the year-end 2019 rate above 3%, after six of the past eight quarters have seen positive net absorption. Proximity to Los Angeles County ports and major thoroughfares into Inland Empire amid a dense population has reinforced stability here in recent years.
Recent activity has involved large space users in the logistics and manufacturing industries. These tenants typically look for space in North County, where the bulk of industrial inventory is clustered, along transportation arteries, which offer larger floor plates with proximity to Los Angeles and the ports. Average market rents in Orange County are among the highest of all major markets in the United States and rent growth continues to be dynamic in light of a low vacancy environment. Year-over-year rent growth is 12.7%, compared with the 10-year average of 7.3% per year. Landlords have offered minimal free rent and concession packages on recent deals.
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