Orange County direct vacancy rates for industrial properties in the 4th quarter remained at a paltry 1.1%, as e-commerce operators demanded facilities near Los Angeles County ports and prospective workers, according to a new report from Kidder Mathews. Reflecting that demand, the average lease rate of $1.58-per-square-foot climbed 32% year-over-year.

Meanwhile, investor demand for industrial product in the county has persisted, despite record-high prices of $322.79-per-square-foot in Q4 and a sliding market cap rate in an era of high interest rates. The shortage of suitable land continues to drive institutional investors to properties that are well-leased and prepared for redevelopment.

Kidder’s near term outlook calls for more of the same, as the retail trade sector continues to thrive, and is the driving force behind job growth in the e-commerce, transportation and utility industries. Orange County has experienced extraordinary rent increases in 2022, with a net absorption of 1.4 million square feet.