GRUBB & ELLIS SURVEY OF OFFICE AND INDUSTRIAL SPACE : Vacancy Rates Decline as Firms Grab Quarters

Orange County companies continued to gobble up office space during the first six months of 1989, especially in the smaller, less-plush facilities, according to a report issued Tuesday by Grubb & Ellis Co.

The county vacancy rate for research and development space, usually defined as industrially zoned property used for both manufacturing and office, has fallen from 26% in 1986 to under 14% today, the commercial real estate broker said.

Grubb & Ellis said many developers stopped building the R&D; properties, which are often used by small manufacturers who don’t want separate office and factory locations, because the market was glutted.

The percentage of vacant offices in the county has also declined in the last year, from 24% in mid-1988 to 21% today, according to the report.

That leaves more than 10 million square feet of empty office space in the county. Another 5 million square feet of office space is under construction and about 10 million more is on the drawing board.

SECOND-QUARTER SURVEY OF RESEARCH AND DEVELOPMENT SPACE IN COUNTY

Grubb & Ellis estimates there are 53.5 million square feet of research and development space in Orange County, with an additional 1.1 million square feet under construction. Research and development space is usually defined as industrially zoned property used for both manufacturing and office.

Existing Space Under Sales/Lease Space % Construction Activity Sq. Feet Vacant 1989 2nd Quarter Greater airport area 23,674,294 12.18 143,550 311,894 South county 9,224,711 22.73 709,357 295,663 Central county 3,880,778 11.26 79,886 57,830 North county 9,640,258 10.49 77,583 207,661 West county 7,094,124 12.48 85,030 224,383 County total 53,514,165 13.66 1,095,406 1,097,431

Source: Grubb & Ellis