Orange County Warehouse Market Update – Q1 2025 Snapshot

Overview The Orange County Airport industrial market experienced a notable softening in the first quarter of 2025. Vacancy rates rose to 6.1%, up from 4.1% year-over-year, providing tenants with more opportunities but signaling a slowdown in landlord leverage. While deal volume remained active, longer decision-making timelines and hesitancy due to capital markets and tariff uncertainty influenced the leasing landscape. Total net absorption for the trailing 12 months stood at -1.1 million square feet.

Sales Activity Sales volume was driven by continued seller confidence, with notable transactions including:

• 960 W. 16th Street, Costa Mesa: Sold for $20,450,000 ($199.84/land SF) for redevelopment.
• 3020 Pullman Street, Costa Mesa: $16,650,000 ($425.30/SF) investment sale.
• 3301 W. Segerstrom Ave, Santa Ana: $11,974,710 ($330.00/SF) freestanding building.

Leasing Highlights While inventory remains tight, leasing activity remained steady for well-located assets. Notable leases included:

• 17760 Newhope St, Fountain Valley: 43,358 SF at $1.23 NNN PSF.
• 311 E. Alton Ave, Santa Ana: 25,000 SF at $1.20 NNN PSF.
• 2602 S. Halladay St, Santa Ana: 14,572 SF at $2.66 NNN PSF.

Key Market Stats (OC Airport Submarket)

• Inventory: 80M SF (+0.7%)
• Under Construction: 54.1K SF
• 12 Mo. Net Absorption: -1.1M SF
• Vacancy Rate: 6.1% (+2.0%)
• Average Asking Rent: $1.70/SF (-0.2%)
• Average Sale Price: $360/SF (+1.4%)
• Cap Rate: 5.4% (+0.1%)

For Sale and Lease Availability

• For Sale: 87 properties, ranging from 880 SF to 162,656 SF; average asking price ranges from $333 to $620 PSF.
• For Lease: Over 380 listings across Costa Mesa, Fountain Valley, Irvine, Santa Ana, and Tustin, with asking rents between $1.26 and $1.87 NNN PSF.

Takeaway Orange County’s Airport area market is entering a phase of rebalancing. While seller expectations remain high, buyer caution is increasing. Leasing remains steady, but the rise in vacancy offers tenants more leverage. With construction starts down and interest rates stable, the remainder of 2025 may bring increased leasing activity if economic sentiment strengthens.

Website Placement: This article is best suited for a Q1 2025 Market Update post on the homepage or blog of https://orangecountywarehouses.com.