O.C.’s 3rd-Quarter Office Vacancy Rate Down 10% : Real estate: Sustained decline is aided by lack of new construction. Retail sector also makes significant headway.

In a continuing show of improvement, the vacancy rate in Orange County’s office towers dropped nearly 10% to 16.1% during the third quarter compared to the same time last year, a real estate company said.

Since office vacancy rates peaked at 25% in 1988, Orange County’s vacancy rate has mostly declined in recent years, primarily because of the lack of new office building construction. With the exception of one large office tower in Santa Ana, there has been no new major office building here in the past four years.

The county’s office vacancy rate also declined 6.7% in the third quarter ending in September from 17.5% in the second quarter, according to Grubb & Ellis Commercial Real Estate Services, a brokerage firm.

“With no new construction and continued positive absorption, the vacancy rate has continued to decline,” said Michael Dorsey, senior vice president with Grubb & Ellis’ Newport Beach office.

Still, while the market continues to improve, it will take vacancy rates below 10% to spark more office building in the county, specialists said.

Some areas of the county are improving even more. Vacancy rates for the area around John Wayne Airport dropped to 13.3% for the quarter from 17.5% the same time last year.

The market for retail centers also showed significant improvement, with at least four new shopping centers under construction in the county. Three more are planned.

And the vacancy rate at Orange County’s existing retail centers was 5.8% in the third quarter of 1995, down from 6.1% a year ago. In the central coast and South County areas, where most of the new shopping centers are located, vacancy rates were even lower at 3.6% and 5.8% respectively.