MARKET DRIVERS
The Orange County industrial market remains competitive despite a decrease in tenant competitiveness because of an incremental decline in demand following years of outstanding performance. The outcome is directly connected to the decrease in leased spaces. The changing demands of tenants are affecting leasing activity and causing a slowdown as businesses reevaluate their space requirements.
The industrial sector in Orange County, California, is recognized for its versatility, covering manufacturing, aerospace, healthcare, and technology. In 2024, a range of factors will shape the industrial sector projection for Orange County. These include technological advancements, economic conditions, as well as various trends, developments, and statistics.
ECONOMIC REVIEW
US industrial occupiers are streamlining their distribution facilities and warehouses to cut costs and increase productivity. The worldwide pandemic’s e-commerce boom significantly raised demand for distribution centers closer to consumers. This thus led to a building boom.
There will probably be slower growth than in prior quarters because of the rising cost and demand for space, the possibility that the federal tightening cycle will start in early 2024, and the continued momentum of the economy. The diverse spectrum of industries in Orange County is indicative of the importance of diversity to the local economy.
NEAR-TERM OUTLOOK
Businesses are currently assessing their networks, taking into account variables such as location, supply chain effectiveness, and real estate cost reductions. The objectives are to lower labor and transportation costs, enhance distribution networks, and adjust to shifting market conditions. The regional average has risen in line with market vacancy rates, and more growth is anticipated in the upcoming quarters. Recently, there have been fewer new leases than there were previously. Several developments are anticipated to be completed without tenants.
Click here to subscribe to Kidder Mathews market research.