While the residential market is in flux, the local industrial sector posted strong gains during the fourth quarter, according to a report by Grubb & Ellis/BRE Commercial. The year ended with 3.2 million square feet of positive net absorption and 84% of all submarkets in the county posted positive numbers.
Net absorption numbers were up slightly from 2004, with the area experiencing just over three million square feet of positive absorption. For 2005, large lease deals held sway. Among the largest deals, IPD Packaging inked 108,400 square feet in Vista; Restaurant Depot leased 93,138 square feet in Miramar; Sea World Inc. took 71,619 square feet in Mission Valley; and Qualcomm agreed to 67,995 square feet in Sorrento Mesa.
Oceanside topped the northern submarkets with 522,000 square feet absorbed for the year; Rancho Bernardo pulled in 392,000 square feet of positive absorption; and Vista landed nearly 360,000 square feet. In all, the three submarkets combined for roughly 40% of the year's positive absorption. South County submarkets, including Chula Vista and Otay Mesa, accounted for some 35% of absorption.
In all, Otay Mesa led the way with 400,000 square feet absorbed during the fourth quarter alone and over 720,000 square feet absorbed for the year. According to the report Otay Mesa's numbers "resulted from the relatively low cost of industrial land combined with the availability of larger buildings." Other factors fueling the submarket's success include the construction of SR-125 and "the improving industrial economy with Mexico."
As for leasing rates, the asking rate for the county was $0.94 per square feet per month. That number was a 5.3% hike from 2004. Also, 20 of the 25 submarkets raised rates since the end of 2004.
Vacancy rates also posted strong numbers with the countywide vacancy rate holding at 6.8%. The county reached those numbers although Otay Mesa hit 20.2% "due to the level of newly constructed buildings added to the inventory."
Otay Mesa had 345,000 square feet of space under construction at year's end. In all, 3.3 million square feet are in the pipeline for the county, with Sorrento Mesa's 480,000 square feet and Vista at 326,000 square feet adding to the inventory.
Net absorption numbers were up slightly from 2004, with the area experiencing just over three million square feet of positive absorption. For 2005, large lease deals held sway. Among the largest deals, IPD Packaging inked 108,400 square feet in Vista; Restaurant Depot leased 93,138 square feet in Miramar; Sea World Inc. took 71,619 square feet in Mission Valley; and Qualcomm agreed to 67,995 square feet in Sorrento Mesa.
Oceanside topped the northern submarkets with 522,000 square feet absorbed for the year; Rancho Bernardo pulled in 392,000 square feet of positive absorption; and Vista landed nearly 360,000 square feet. In all, the three submarkets combined for roughly 40% of the year's positive absorption. South County submarkets, including Chula Vista and Otay Mesa, accounted for some 35% of absorption.
In all, Otay Mesa led the way with 400,000 square feet absorbed during the fourth quarter alone and over 720,000 square feet absorbed for the year. According to the report Otay Mesa's numbers "resulted from the relatively low cost of industrial land combined with the availability of larger buildings." Other factors fueling the submarket's success include the construction of SR-125 and "the improving industrial economy with Mexico."
As for leasing rates, the asking rate for the county was $0.94 per square feet per month. That number was a 5.3% hike from 2004. Also, 20 of the 25 submarkets raised rates since the end of 2004.
Vacancy rates also posted strong numbers with the countywide vacancy rate holding at 6.8%. The county reached those numbers although Otay Mesa hit 20.2% "due to the level of newly constructed buildings added to the inventory."
Otay Mesa had 345,000 square feet of space under construction at year's end. In all, 3.3 million square feet are in the pipeline for the county, with Sorrento Mesa's 480,000 square feet and Vista at 326,000 square feet adding to the inventory.