Direct net absorption was positive for the third consecutive quarter, posting 216,939 square feet in first quarter 2021, according to Kidder Mathews’ latest report. The acceleration of e-commerce sales, emerging biotech/biomed industries and continued conversions of older industrial assets in Orange County kept vacancies low. In fact, direct vacancies decreased 3 percent from the prior year to end the quarter at 2.4 percent.

Leasing activity declined 28 percent year-over-year to 2.7 million square feet. Requirements between 10,000 square feet and 25,000 square feet experienced the most leasing activity with more than 760,000 square feet leased. The increase in activity may be a result of tenants adjusting business operations and relocating to smaller properties, the report surmises.

Although overall rent growth may have softened in the past year, average asking rents continue to report at all-time highs, concluding at $1.03 per-square-foot on a triple-net basis, says Kidder Mathews.