The following reflects Orange County industrial market conditions as of Q3 2026.
MARKET DRIVERS
Orange County’s industrial market is showing signs of stabilization as landlords have adjusted expectations and increasingly met the market. While asking and effective rental rates have declined from their recent peaks, pricing appears to be stabilizing, contributing to improved leasing activity across the market. By the end of Q3, leasing activity reached approximately 1.4M SF, and the gap between supply and demand continued to narrow, although overall market conditions still favor tenants.
Demand is also being supported by several emerging drivers. Efforts to expand domestic manufacturing and encourage companies to onshore production are generating additional requirements for industrial space, while increased investment in aerospace and defense initiatives is benefiting Orange County’s well-established manufacturing base. Advanced manufacturing has become one of the market’s most active areas of interest, replacing industrial outdoor storage as the sector receiving the greatest attention from owners, investors, and occupiers. In response, many landlords are investing in their properties to increase available electrical power and better accommodate advanced manufacturing, aerospace, and other power-intensive users. Combined with positive net absorption and a slowing increase in available space, these trends suggest the Orange County industrial market is moving toward greater balance.
ECONOMIC REVIEW
The Orange County economy remains strong and stable, supported by a diverse employment base, established business community, and economic fundamentals that allow the region to perform largely on its own merits. While global economic uncertainty, elevated interest rates, persistent inflation, and a slowing housing market have created headwinds, many Orange County businesses continue to move forward with expansion, investment, and hiring decisions despite these broader challenges.
Population growth remains modest, and geographic and development constraints continue to limit new housing and commercial supply. These same barriers to entry, however, help support the value of existing real estate and have contributed to rent growth that has generally outpaced national averages. Although consumers and businesses remain mindful of higher costs and interest rates, the Orange County economy has demonstrated considerable resilience. As economic conditions improve and interest rates normalize, the region appears well positioned to benefit from renewed long-term growth.
NEAR-TERM OUTLOOK
Orange County’s near-term industrial outlook continues to improve as landlords have adjusted to current market conditions and leasing activity has strengthened. Rental rates appear to have reached a floor and are beginning to stabilize, helping bring landlords and tenants closer together and resulting in increased transaction activity. At the same time, the recent supply imbalance is easing considerably as the current development cycle winds down. With approximately 431,000 SF of industrial space under construction, concerns surrounding additional oversupply have diminished significantly.
Vacancy may remain elevated in the near term as tenants continue to evaluate alternatives and take advantage of increased availability. However, the sharp reduction in new construction, improving leasing velocity, and stabilization of rental rates are creating a healthier balance between supply and demand. Importantly, Orange County business owners continue to forge ahead with expansion and operational decisions despite broader economic uncertainty.
Looking forward, Orange County appears well positioned for a meaningful rebound as global economic conditions become more predictable. Greater clarity surrounding trade policy and tariffs, together with lower or more stable interest rates, could provide the confidence needed to accelerate business investment and real estate decisions. With limited new supply entering the market and leasing activity already improving, the fundamentals are increasingly in place for stronger market conditions ahead.
Frequently Asked Questions
What is the Orange County industrial vacancy rate in Q3 2026?
The Orange County industrial direct vacancy rate was 6.0% at the end of Q3 2026, according to Kidder Mathews research. That is unchanged from 6.0% in Q2 2026 and up 50 basis points from 5.5% in Q3 2025. Total vacancy, which includes sublease space, stood at 6.7%. (Data source: CoStar)
What is the Orange County industrial availability rate in Q3 2026?
The Orange County industrial availability rate was 9.0% in Q3 2026, according to Kidder Mathews research. That compares with 8.9% in Q2 2026 and 8.4% in Q3 2025, a year-over-year increase of 60 basis points. Kidder Mathews research notes that the increase in available space is slowing. (Data source: CoStar)
What are average industrial asking rents in Orange County in Q3 2026?
Average asking lease rates for Orange County industrial space were $1.45 per square foot per month on an NNN basis in Q3 2026, according to Kidder Mathews research. The rate was flat from $1.45 in Q2 2026 and down 2.03% from $1.48 in Q3 2025. Kidder Mathews research indicates that rental rates appear to have reached a floor and are beginning to stabilize. (Data source: CoStar)
Which Orange County industrial submarkets have the highest and lowest asking rents in Q3 2026?
Among Orange County industrial submarkets reporting a rate, average direct rental rates (NNN) in Q3 2026 ranged from $1.15 per square foot per month in La Palma to $2.09 in Dana Point/San Juan/San Clemente, according to Kidder Mathews research. Other higher-priced submarkets included Tustin at $1.78, Mission Viejo at $1.77, and Irvine Spectrum at $1.75. By region, South County averaged $1.71 and West County averaged $1.31. (Data source: CoStar)
How much industrial space was leased in Orange County in Q3 2026?
Orange County industrial leasing activity totaled 1,450,415 square feet in Q3 2026, according to Kidder Mathews research. Year-to-date leasing activity reached 8,121,181 SF, down 27.21% from 11,157,258 SF in 2025 YTD. Airport Area led submarket leasing with 671,646 SF in the quarter, followed by North County with 386,197 SF. (Data source: CoStar)
What was industrial net absorption in Orange County in Q3 2026?
Orange County industrial net absorption was positive 366,128 SF in Q3 2026, according to Kidder Mathews research. Net absorption measures the change in occupied space, so a positive figure means more space was occupied than vacated. Year-to-date net absorption was 388,819 SF, compared with -1,413,957 SF in 2025 YTD. By region, Airport Area (361,556 SF) and West County (215,484 SF) were positive, while North County (-151,829 SF) and South County (-59,083 SF) were negative. (Data source: CoStar)
Which Orange County industrial submarkets have the highest and lowest vacancy in Q3 2026?
La Palma had the highest direct vacancy rate in Orange County at 27.8% in Q3 2026, followed by Cypress at 16.2% and Irvine Spectrum at 14.9%, according to Kidder Mathews research. Newport Beach and Seal Beach each reported 0.0% direct vacancy, and Mission Viejo reported 0.7%. By region, South County had the highest direct vacancy at 9.0%, while Airport Area had the lowest at 4.8%. (Data source: CoStar)
How much industrial space is under construction in Orange County in Q3 2026?
Approximately 431,000 SF of industrial space was under construction in Orange County in Q3 2026, according to Kidder Mathews research. New deliveries were 290K SF, down year over year. The largest project listed is Huntington Gateway at 5055 Skylab Ln + 14393 Skybolt Ln in West County, a 261,707 SF development by Sares Regis Group scheduled for delivery in March 2027. Kidder Mathews research notes that the sharp reduction in new construction has significantly diminished oversupply concerns. (Data source: CoStar)
What are industrial sale prices and cap rates in Orange County in Q3 2026?
The average industrial sale price in Orange County was $306.99 per square foot in Q3 2026, with a cap rate of 3.9%, according to Kidder Mathews research. Sale transactions totaled 506,815 SF in the quarter and 2,949,274 SF year to date, down 45.67% from 5,427,964 SF in 2025 YTD. (Data source: CoStar)
What was the largest industrial sale in Orange County in Q3 2026?
The largest Orange County industrial sale in Q3 2026 was Irvine Business Complex in the Airport Area, a 263,988 SF property that sold for $75,000,000, or $284.10 per square foot, according to Kidder Mathews research. Robinson Pharma, Inc. was the buyer and Starpointe Ventures was the seller. The second-largest sale was CommerceCentre@BuenaPark in North County, a 92,395 SF property that sold for $28,100,000 ($304.13 per SF) by Rexford Industrial Realty, Inc. to an undisclosed buyer. (Data source: CoStar)
What was the largest industrial lease in Orange County in Q3 2026?
The largest Orange County industrial lease in Q3 2026 was 136,612 SF at 18582 Teller Ave in the Airport Area, with a transaction date of July 2026, according to Kidder Mathews research. Ares Management Corp. was the landlord and the tenant was undisclosed. The next largest were LogistiCenter in the Airport Area at 134,004 SF (August 2026, landlord Dermody) and Anaheim Concourse in North County at 132,231 SF (September 2026, tenant Norman S Wright Climatec Mechanical). (Data source: CoStar)
What is the outlook for the Orange County industrial market after Q3 2026?
The near-term outlook for the Orange County industrial market continues to improve, according to Kidder Mathews research. Vacancy may remain elevated in the near term, but the sharp reduction in new construction, improving leasing velocity, and stabilizing rental rates are creating a healthier balance between supply and demand. Greater clarity on trade policy and tariffs, together with lower or more stable interest rates, could accelerate business investment and real estate decisions. Demand drivers include domestic manufacturing, aerospace and defense, and advanced manufacturing.
Last updated: Q3 2026. Data source: EDD, CoStar. Compiled by the Kidder Mathews Research Group.
Q3 2026 Orange County Industrial Market: Key Data Points
Explore our full Orange County industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy: The direct vacancy rate was 6.0%, flat from Q2 2026 and up 50 basis points from 5.5% in Q3 2025. Total vacancy was 6.7%.
- Availability: The availability rate was 9.0%, compared with 8.9% in Q2 2026 and 8.4% in Q3 2025.
- Asking Rents: The average asking lease rate was $1.45 per SF per month (NNN), unchanged from Q2 2026 and down 2.03% from $1.48 in Q3 2025.
- Net Absorption: Net absorption was positive 366,128 SF in Q3 2026 and 388,819 SF year to date, compared with -1,413,957 SF in 2025 YTD.
- Leasing Activity: Lease transactions totaled 1,450,415 SF in the quarter and 8,121,181 SF year to date, down 27.21% from 11,157,258 SF in 2025 YTD.
- Sales Activity: Sale transactions totaled 506,815 SF in the quarter, with an average sale price of $306.99 PSF and a cap rate of 3.9%. The largest sale was Irvine Business Complex at $75,000,000 ($284.10/SF).
- Construction: Approximately 431,000 SF of industrial space was under construction, and new deliveries were 290K SF, down year over year.
Submarket Statistics
| Submarket | Total Inventory (SF) |
Direct Vacancy Rate |
Total Vacancy Rate |
Total Availability Rate |
Q3 2026 Direct Net Absorption (SF) |
Q3 2026 Total Leasing Activity (SF) |
YTD Total Leasing Activity (SF) |
Average Direct Rental Rate (NNN) |
|---|
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | Q3 2026 Direct Net Absorption (SF) | Q3 2026 Total Leasing Activity (SF) | YTD Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|---|
| Costa Mesa | 7,569,438 | 2.6% | 2.7% | 4.4% | 48,059 | 16,710 | 172,582 | $1.27 |
| Fountain Valley | 3,579,395 | 2.2% | 7.0% | 9.2% | -52,188 | 66,675 | 364,719 | $1.52 |
| Irvine | 11,854,101 | 7.8% | 9.6% | 10.1% | 168,122 | 246,554 | 721,287 | $1.56 |
| Newport Beach | 368,093 | 0.0% | 0.0% | 0.0% | 0 | 0 | 0 | $0.00 |
| Santa Ana | 30,656,728 | 3.5% | 4.1% | 4.9% | 235,566 | 183,588 | 1,230,763 | $1.55 |
| Tustin | 5,140,525 | 10.3% | 11.2% | 8.6% | -38,003 | 158,119 | 375,442 | $1.78 |
| Airport Area | 59,168,280 | 4.8% | 5.8% | 6.4% | 361,556 | 671,646 | 2,864,793 | $1.51 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | Q3 2026 Direct Net Absorption (SF) | Q3 2026 Total Leasing Activity (SF) | YTD Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|---|
| Anaheim | 45,272,577 | 6.6% | 7.2% | 9.6% | -97,660 | 134,896 | 1,121,668 | $1.47 |
| Brea/La Habra | 15,639,213 | 3.7% | 5.2% | 7.3% | 18,226 | 93,524 | 388,312 | $1.37 |
| Buena Park | 13,151,783 | 9.7% | 9.7% | 20.1% | -200,284 | 68,533 | 396,947 | $1.36 |
| Fullerton | 19,464,515 | 4.4% | 6.5% | 8.3% | 155,353 | 37,642 | 647,668 | $1.46 |
| Orange | 13,207,223 | 4.1% | 4.7% | 6.6% | -41,360 | 39,761 | 276,699 | $1.31 |
| Placentia/Yorba Linda | 4,899,671 | 3.6% | 3.6% | 6.2% | 13,896 | 11,841 | 58,223 | $1.38 |
| North County | 111,634,982 | 5.8% | 6.7% | 9.8% | -151,829 | 386,197 | 2,889,517 | $1.40 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | Q3 2026 Direct Net Absorption (SF) | Q3 2026 Total Leasing Activity (SF) | YTD Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|---|
| Irvine Spectrum | 11,152,614 | 14.9% | 15.0% | 15.9% | -101,367 | 95,531 | 294,542 | $1.75 |
| Laguna Hills/Aliso Viejo | 1,884,141 | 2.8% | 3.2% | 2.7% | 40,480 | 3,760 | 78,199 | $1.67 |
| Laguna Niguel/Laguna Beach | 291,371 | 2.9% | 2.9% | 2.8% | 0 | 0 | 0 | $0.00 |
| Lake Forest/Foothill Ranch | 7,527,209 | 5.2% | 6.8% | 14.3% | -17,409 | 5,350 | 77,870 | $1.56 |
| Mission Viejo | 748,218 | 0.7% | 0.7% | 1.5% | 5,743 | 1,209 | 11,302 | $1.77 |
| RSM/CDC/Ladera Ranch | 1,903,047 | 2.5% | 2.5% | 2.7% | 7,469 | 6,000 | 27,156 | $1.68 |
| Dana Point/San Juan/San Clemente | 3,062,216 | 6.8% | 6.8% | 13.2% | 6,001 | 31,400 | 104,409 | $2.09 |
| South County | 26,568,816 | 9.0% | 9.5% | 12.7% | -59,083 | 143,250 | 593,478 | $1.71 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | Q3 2026 Direct Net Absorption (SF) | Q3 2026 Total Leasing Activity (SF) | YTD Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|---|
| Cypress | 4,829,980 | 16.2% | 16.3% | 20.8% | 121,983 | 57,145 | 253,292 | $1.41 |
| Garden Grove | 12,330,217 | 5.2% | 5.6% | 5.9% | 51,389 | 82,295 | 533,573 | $1.18 |
| Huntington Beach | 14,215,832 | 3.3% | 3.4% | 3.9% | 30,141 | 91,495 | 727,338 | $1.52 |
| La Palma | 1,785,908 | 27.8% | 27.8% | 31.1% | 0 | 0 | 0 | $1.15 |
| Los Alamitos/Stanton | 3,810,341 | 1.2% | 1.5% | 1.8% | -6,789 | 8,251 | 62,800 | $1.72 |
| Seal Beach | 941,679 | 0.0% | 0.0% | 9.4% | 0 | 0 | 0 | $0.00 |
| Westminster | 2,326,415 | 5.5% | 5.5% | 8.6% | 18,760 | 10,136 | 196,390 | $1.37 |
| West County | 40,240,372 | 6.4% | 6.5% | 7.9% | 215,484 | 249,322 | 1,773,393 | $1.31 |
| Submarket | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | Q3 2026 Direct Net Absorption (SF) | Q3 2026 Total Leasing Activity (SF) | YTD Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|---|
| Total | 237,858,868 | 6.0% | 6.7% | 9.0% | 366,128 | 1,450,415 | 8,121,181 | $1.45 |
| Building Size (SF) | Total Inventory (SF) | Direct Vacancy Rate | Total Vacancy Rate | Total Availability Rate | Q3 2026 Direct Net Absorption (SF) | Q3 2026 Total Leasing Activity (SF) | YTD Total Leasing Activity (SF) | Average Direct Rental Rate NNN |
|---|---|---|---|---|---|---|---|---|
| 5,000 – 9,999 | 17,173,291 | 1.7% | 1.9% | 3.2% | 10,178 | 91,097 | 439,826 | $1.71 |
| 10,000 – 24,999 | 60,447,932 | 3.1% | 3.4% | 4.7% | 97,505 | 462,601 | 1,799,468 | $1.60 |
| 25,000 – 49,999 | 41,563,759 | 3.2% | 3.8% | 5.4% | 76,706 | 341,193 | 1,464,667 | $1.49 |
| 50,000 – 99,999 | 38,069,969 | 5.2% | 6.1% | 8.9% | 159,291 | 54,834 | 1,328,232 | $1.46 |
| 100,000 – 249,999 | 48,919,544 | 11.7% | 13.1% | 14.5% | 547,538 | 437,268 | 2,465,672 | $1.41 |
| 250,000 Plus | 31,684,373 | 9.5% | 10.6% | 16.6% | -525,090 | 63,422 | 623,316 | $1.41 |
Significant Sale Transactions Q3 2026
| Property | Submarket | SF | Sale Price | $/SF | Buyer | Seller |
|---|---|---|---|---|---|---|
| Irvine Business Complex | Airport Area | 263,988 | $75,000,000 | $284.10 | Robinson Pharma, Inc. | Starpointe Ventures |
| CommerceCentre@BuenaPark | North County | 92,395 | $28,100,000 | $304.13 | Undisclosed | Rexford Industrial Realty, Inc. |
| 14131-14171 Chambers Rd | Airport Area | 55,046 | $14,300,000 | $259.78 | Spirit & Truth Worship Center | Trinity Broadcasting Network |
| 17872 Cowan Ave | Airport Area | 24,652 | $10,800,000 | $438.10 | OC Music & Dance | Kimco Staffing Services, Inc. |
| 3102 W Adams St | Airport Area | 29,932 | $8,590,000 | $286.98 | BNWorld, Inc. | Lehrer Family Properties, LP |
| 925 S Lakeview Ave | North County | 23,450 | $7,050,000 | $300.64 | Goodyear Properties, LLC | Greenleaf, LLC |
Significant Lease Transactions Q3 2026
| Property | Submarket | SF | Transaction Date | Landlord | Tenant |
|---|---|---|---|---|---|
| 18582 Teller Ave | Airport Area | 136,612 | July 2026 | Ares Management Corp. | Undisclosed |
| LogistiCenter | Airport Area | 134,004 | August 2026 | Dermody | Undisclosed |
| Anaheim Concourse | North County | 132,231 | September 2026 | BentallGreenOak (BGO) | Norman S Wright Climatec Mechanical |
| 6270-6290 Caballero Blvd | North County | 130,200 | July 2026 | Elion Partners | JAF Logistics |
| Warland/Cypress Business Center | West County | 128,224 | September 2026 | Warland Investments Co. | Undisclosed |
| 1500 E Walnut Ave | North County | 121,946 | September 2026 | Rexford Industrial Realty, Inc. | Undisclosed |
| Barranca Parkway | South County | 84,580 | July 2026 | The Irvine Co. | Undisclosed |
| 6300-6340 Valley View St | North County | 63,422 | September 2026 | PGIM, Inc. | Undisclosed |
Significant Under Construction
| Property | Address | Submarket | SF | Owner | Delivery |
|---|---|---|---|---|---|
| Huntington Gateway | 5055 Skylab Ln + 14393 Skybolt Ln | West County | 261,707 | Sares Regis Group | March 2027 |
| Goodman Commerce Center Cypress | 5665 Plaza Dr | West County | 191,894 | Goodman North America | July 2027 |
| Amazon Distribution | 625 N Grand Ave | Airport Area | 112,500 | Amazon | March 2027 |
| Beach Industrial Center | 7474 Garden Grove Blvd | West County | 69,498 | Seventh Street Development | October 2027 |
| 3200 Nasa St | 3200 Nasa St | North County | 52,102 | Oltmans Construction Co. | September 2026 |
Data as of Q3 2026. Source: EDD, CoStar. Prepared by the Kidder Mathews Research Group.
ContactGARY BARAGONA |
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