ORANGE COUNTY has maintained its stability while e-commerce operators explore warehouses to store goods because of its proximity to ports in Los Angeles County and significant thoroughfares into the Inland Empire. The North Area’s logistics inventory benefits from being close to the ports and from the availability of prospective workers in great demand in the region.
STRONG REGIONAL DEMAND DRIVERS have maintained investors’ interest in Orange County despite record-high prices and a sliding market cap rate in an era of high-interest rates. Unlike other real estate sectors, industrial activity flow has remained consistent even if prices may decrease when cap rates increase as long as interest rates are high.
DUE TO A SHORTAGE OF SUITABLE LAND, institutional investors keep investing in industrial properties in Orange County that are well-leased and prepared for redevelopment. Fullerton, one of Orange County’s most efficient logistical hubs, is in a high-density area with ready access to the port in Los Angeles and the Inland Empire.
IN NOVEMBER 2022, the Orange County adjusted unemployment rate was 3.0%, lower than the 4.1% rate the prior year.
THE PORT OF LOS ANGELES handled 9,182,287 TEUs in year-to-date 2022 and 8,589,554 TEUs operated by the Port of Long Beach.
EMPLOYMENT GROWTH in the transportation and e-commerce sectors was primarily driven by the retail trade sector, which created 2,800 jobs (64% overall increase). Retailers expanded their efforts throughout the Christmas season, because despite the fact that inflation remains a major issue, consumers have been making purchases.
AT A 1.1% RATE, there isn’t much margin for tightening, and vacancies haven’t moved much in the last year. In the long run, Orange County has experienced extraordinary rent increases in 2022, with a net absorption of 1.4M SF in the positive.
Click here to subscribe to Kidder Mathews market research.