Tag Archive for: Orange County Industrial Market
The Big Squeeze – Feeling the Pressure of Low Inventory
They call New York City the Big Apple and New Orleans the Big Easy. When it comes to the industrial property market, Orange County is becoming known as the Big Squeeze. Conditions are such that good value is getting harder to find, competition for space is becoming intense and prices are being forced up by the simple law of supply and demand. Vacancy is now so low, (2.6% at the end of September) that some businesses are forced to stay where they are because a better option is just not available. The result: lower transaction volume and even fewer properties to choose from. Measured in square feet, sale transaction volume in Q3 of 2015 was 47% lower than it was the same time last year. Even leasing activity is feeling the pressure, having dropped by 67% in the same period. Read more
Harley Davidson Finds Needle in Haystack
March 24, 2014 | By Carrie Rossenfeld
WESTMINSTER, CA—The motorcycle manufacturer leases 41,939 square feet on a 10-year lease for showroom space at Goldenwest Circle, a location that meets the tenant’s needs for freeway frontage.
Harley Davidson of Westminster/Huntington Beach now has a showroom at 15044, 15051 and 15080 Goldenwest Circle here. The motorcycle manufacturer has signed with owner Realty Associates Fund X LP a 10-year lease valued at $3.7 million for the space, which consists of three buildings totaling 41,939 square feet.
The showroom, which provides excellent frontage on the 405 Freeway, was leased as the result of a complex transaction involving Voit Real Estate Services’ Anaheim-based brokers Mike Bouma, SVP; and Paul Caputo, VP. “Our market knowledge and years of experience were put to the test,” says Caputo.
The three adjacent buildings will allow for expansion of the showroom, service area and additional motorcycle storage while not losing freeway exposure. According to Craig Franz, president of Harley Davidson of Westminster/Huntington Beach, “The Voit brokers were able to find a freeway-frontage facility that met our very specific location and size requirements prior to the facility coming to the open market—a virtual needle in a
haystack.”
The Voit team negotiated a favorable long-term lease, coordinated and assisted with streamlining Harley Davidson’s use permits with the city and backfilled its previous facilities, with no down time. “The myriad of moving parts all came together perfectly and helped us focus solely on our move, as well as the growth of our business,” adds Franz.
Bouma recently spoke with GlobeSt.com about the Orange County industrial market, saying that overall market tightening is already well underway. Bouma noted that the tremendous amount of capital pursuing deals on both an owner/user and investor basis is driving industrial prices up substantially.
“Orange County industrial investors need to be open-minded in today’s market,” Bouma says. “A successful investor in the current market will be prepared to take on lease-up risk, down time and rollover expenses in order to be able to make a deal happen.”
Bouma also noted that tenants, too, must be flexible in today’s tight industrial market. “Industrial tenants should give themselves plenty of time in advance of their lease expiration in order to locate and negotiate on a new facility.” He added that there are simply fewer options in the market compared to three to five years ago.
Alternatively, Orange County industrial owners are now in a strong position, according to Bouma. “We are seeing much shorter lease-up time and fewer tenant concessions in today’s market; an ongoing indication that the market is quickly improving.”
