Orange County’s industrial leasing market continued its gradual shift this quarter, with vacancy rates rising to 6.5%, up from 6.1% last quarter and 4.3% year-over-year. While tenant demand remains active, the increase in availability is creating more optionality for users who previously struggled to find space. Leases are still getting done, but marketing periods have lengthened, and lease negotiations have become more nuanced.
On the sales front, inventory remains tight, though we are seeing more investment opportunities come up. Cap rates have inched up slightly to 5.5%, compared to 5.3% a year ago, reflecting a modest shift in pricing expectations. While it’s still generally favorable for sellers, the market is seeing more balance between buyers and sellers, especially as interest rates and underwriting assumptions continue to normalize.
