Orange County Industrial Market Report

Developers plan teardown projects amid limited land availability. Tenant demand for industrial space in Orange County remains strong, with both of its largest submarkets by stock entering this year with sub-3 percent vacancy — a claim just one other major market can make. While moderate upward vacancy momentum is anticipated this year, conditions are likely to remain tight in areas near Los Angeles County and John Wayne International Airport. Upcoming completions are moderate here, with the metro’s overall inventory slated to expand by just 0.7 percent in 2024, thanks in part to a lack of deliveries with footprints above 200,000 square feet. The pipeline, however, is likely to enlarge as the year progresses. In addition to properties already slated to break ground in 2024, a growing number of plans are emerging that would involve demolishing office buildings and replacing them with industrial parks. Fortunately for the metro, leasing activity related to properties larger than 100,000 square feet has held steady over the past two years, suggesting these industrial proposals should have a minimal impact on overall conditions moving forward.