Taking Up Space: There’s at least some good news in the local commercial real estate market: Construction continues to decline, which means that the millions of square feet of empty commercial space on the market in Orange County probably won’t grow much this year.
In office space, for instance, the Construction Industry Research Board recently counted $195 million worth of building permits issued by local governments through November. That’s down 38% from $316 million during the same period in 1989.
Permits are an indicator of future construction--usually within six months or less--so the outlook is for a drop in construction through the first part of 1991.
It was the second straight year that permits for office buildings have dropped, the research board said. They fell 10% between 1988 and 1989, from $437 million to $393 million.
Industrial buildings--factories, warehouses and the like--took an even bigger tumble last year. They fell 55% through November, from $131 million in 1989 to $59 million. They had held steady from 1988 to 1989 at around $142 million worth of permits.
Hotel starts dropped 58%, from $74 million worth of permits in 1989 to $31 million last year. They were off a little less the year before, from $89 million in 1988 to $81 million in 1989, a drop of 9%.
The only people building commercial structures these days are retailers, who obtained $189 million worth of permits for stores through November. That was up 14% from $166 million in 1989, even while store construction in Southern California only rose 2%.
Store construction had dropped in 1989 from 1988 in Orange County, falling 26%, from $261 million to $193 million.