News Summary
Orange County’s commercial development sees a downturn with only 2 million square feet completed, down from 3.8 million the previous year. The landscape is shifting as new players emerge alongside existing developers, leading to notable changes in market dynamics. Despite these challenges, industrial real estate remains strong with lower vacancy rates than the national average. Future projects, including residential developments by major companies, highlight ongoing opportunities in the area, even as some projects encounter environmental concerns.
Orange County Commercial Development Update: Key Players and Market Challenges
Orange County’s commercial development landscape has experienced a significant downturn in new project completions over the past year. According to the annual list released by The Business Journal, 11 developers completed nearly 2 million square feet of projects for the year ending April 30. This figure marks a substantial decrease from the previous year’s total of 3.8 million square feet completed by 12 companies.
Interestingly, turnover among the top developers is notable, with seven of this year’s listed companies not appearing in last year’s rankings. This indicates a shift in market dynamics and competitiveness within this sector. Typically, many of the companies featured on this list offer a range of real estate services extending beyond just commercial development.
Current Market Conditions
Despite the downturn in square footage completed, industrial real estate in Orange County continues to outperform the national average regarding vacancy rates. Presently, vacancy rates in Orange County stand at 4.8%, which is above historical levels but still lower than the national average of 7.8%. This suggests a healthier industrial market in Orange County compared to the rest of the nation, despite facing various challenges.
Leading Developers
Dermody Properties Inc. leads this year’s list, having developed a total of 536,690 square feet through April, representing a remarkable 72% increase from 311,770 square feet in the previous year. The projects spearheaded by Dermody are estimated to be valued at $89 million, including the notable LogistiCenter at 55 in Tustin, which offers 177,766 square feet of distribution space.
Following closely behind, Goodman North America Management LLC secured second place with 509,717 square feet of development, while Rexford Industrial Realty Inc. claimed the third position with 488,000 square feet completed within this same timeframe. LBA Realty, positioned fourth, reported a substantial 323% increase in its development projects, completing 169,200 square feet, soaring from just 40,000 square feet the previous year.
Other developers on the list include Ares Management with 136,612 square feet completed, Almquist developing 54,599 square feet, and Guthrie Development at 85,277 square feet. Additionally, 9th St. Partners LLC from El Segundo ranked sixth with 137,698 square feet developed but cited economic uncertainty and tariffs impacting leasing demand as significant challenges.
Future Developments
Looking ahead, the Irvine Company is working on plans to build 1,858 apartments at the Discovery Park campus in Irvine. This project is pending approval from the City Council. The company is also exploring the conversion of the Oak Creek Golf Club site into a residential project that could accommodate 3,100 units.
In another significant development, a $3 billion mixed-use project by Related California is progressing, featuring 3,750 apartments alongside commercial space, which recently received near-unanimous approval from the Santa Ana City Council. However, not all projects are moving forward smoothly; Geyer Development’s proposed Tuscana PD project is facing opposition from Orange County officials due to environmental and flooding concerns, despite attempts to reduce the project’s size and promises to protect wetlands.
Conclusion
The commercial development landscape in Orange County is evolving, reflecting both opportunities and challenges. As developers adapt to market shifts and seek new projects, the focus will remain on balancing growth with environmental and economic considerations moving forward.
Deeper Dive: News & Info About This Topic
HERE Resources
Santa Ana’s Transformation: Malls to Mixed-Use Housing
Additional Resources
- Commercial Observer: Irvine Company Multifamily Development
- Orange County Business Journal: Commercial Developers Build 2M More Square Feet
- Multi Housing News: Related Eyes $3B Orange County Mixed-Use Project
- News of Orange: Community News Article
- Growth Spotter: DRC Opposes I Drive Project
