Rents up sharply in a tight market--that's the picture for most of the Orange County commercial real estate market in the latest Legg Mason Wood Walker Inc. quarterly report.
Legg Mason charts regional real estate through four phases: recovery, expansion, hypersupply and recession. The curve showing the cycle peaks out and starts to decline where expansion turns to hypersupply.
Orange County's office, industrial and apartment markets are near the top of the charts but still in the expansion segment. Retail lags a bit. Hotels are ahead, perched at the apex of the cycle where hypersupply begins.
Tenant advisor Jerry Neitlich of In/House Corporate Real Estate in Irvine says landlords are making up for inability to raise rents in the early 1990s, when recession and the savings and loan crisis depressed the market.
His advice: modify your needs (is that high-rise view really necessary?) and move fast because "rents are going up real fast and good spaces don't stay on the market very long."
E. Scott Reckard covers real estate for The Times.
He can be reached at (714) 966-7407 and at firstname.lastname@example.org