2008: The Year Ahead-Low Interest Rates & Low Vacancy

January 21, 2008
INDUSTRIAL BROKERS
949-646-2727 PHONE

An interesting dichotomy has developed in Orange County commercial real estate. Industrial and Office Real Estate are heading in different directions. Industrial vacancy is around 4%, maintaining record high occupancy. On the other hand, office vacancy is rising to the 15%+ range. While this rising office vacancy is a concern, it is currently affecting mainly large buildings which housed the shrinking mortgage industry. Large floor plate, Class A buildings will likely see a drop in lease rates. The under 20,000 SF market will remain stronger, especially office buildings for sale to Orange County entrepreneur/owner-occupants.

Industrial real estate is experiencing its best days ever. Occupancy is high, lease rates are rising, and interest rates have fallen to 6% for SBA loans. This presents an incredible opportunity, even if you believe values may dip from these record highs. You can fix the largest component of your company's monthly occupancy cost for 20-25 years! When we go through inflationary times, and periods of high appreciation, your payment will remain level!

If you are interested in the value of your building on a sale or lease basis, or need to review options for relocation of your company, call me today at 949-646-2727.