Irvine is one of Orange County, CA’s wealthiest cities. As a planned city, it was first developed in the 1960s by the Irvine Company. It was incorporated in 1971 and during the 2010 U.S. Census, it had a population of 258,386. In 2016, Irvine was officially named as the city in the country with the largest Asian American plurality. In fact, some 45% of the population can be classified as Asian American. Irvine is home to a lot of industries, including those in the semiconductor and technology fields.
Irvine Industrial Building for Sale & Lease – Should You Buy or Lease?
If you are interested in industrial space to be used as an investment or for running your business from, you have two major choices: buying or leasing. It should be pointed out that there are pros and cons to both of these options.
Looking first at buying industrial space, the pros include the fact that:
- Your costs are constant, at least when it comes to expenses having to do with industrial space
- You can get really good tax deductions, including property taxes and mortgage interest.
- You can rent out some of the space for increased cash flow.
- You can accumulate savings, as the property is likely to appreciate over time.
However, the cons are substantial as well and include:
- Not having much flexibility. If your business contracts or grows, you may have to sell the property sooner than you had planned.
- Having high upfront costs because you need to shell out at least 30 percent of the the selling price as down payment. You will also need to take care of maintenance, appraisal, and other property expenses.
Your other option is to lease your industrial space, which also has clear benefits, including the fact that:
- It is possible to get a prime property, which can help with boosting your reputation.
- You have more working capital because you don’t have to pay for a down payment.
- You can focus on running your business, because property management is not your concern.
However, there are some downsides as well, including:
- Your costs will be variable, with regular rent increases.
- You do not build up any equity in the property, since you don’t own it.
To help choose between the two options, it is essential to be aware of the trends and statistics in terms of prices, supply, and demand.
Irvine Industrial Property for Sale – Trends and Statistics
- The asking price for industrial properties in Irvine in dollars per square foot is $222.13, which is a 2.7% increase over the past three months, and a 10.9% increase year on year. This is higher than the state (142.69) and the metro ($195.29) area.
- The index of total available industrial properties for sale in Los Angeles-Long Beach-Irvine is 28, which represents a 6.7% increase over the past three months but a 2.9% decrease year on year.
- The index of total number of listings of industrial properties available in Los Angeles-Long Beach-Irvine is 26, which is a 7.7% increase over the past three months, but a 7.2% increase year on year.
- The profile view index industrial property for sale in the Los Angeles-Long Beach-Irvine metro area is 174, which is a 19.2% increase over the past three months, and a 30.9% increase year on year.
- The index of total square feet of available industrial space for sale in the Los Angeles-Long Beach-Irvine metro area is 26, which is a 0.2% decrease over the past three months, and an 18.8% decrease year on year.
Irvine Industrial Property for Lease – Trends and Statistics
- The current rent for industrial properties for lease in Irvine in dollars per square foot per year is $15.17. This represents a 2.5% increase over the past three months, and a 7.5% increase year on year. This is higher than the state ($10.31), metro ($11.75), and county ($12.93) area.
- The index of total number of industrial spaces for lease in the Los Angeles-Long Beach-Irvine area is 34, which represents a 0.5% decrease over the past three months, and an 11.9% decrease year on year.
- The profile view index for industrial properties for lease in the Los Angeles-Long Beach-Irvine area is 128, which is a 51.9% decrease over the past three months, and a 43.5% decrease year on year.
- The index of total square feet of industrial space available for lease in the Los Angeles-Long Beach-Irvine area is 29, which is an 8.7% decrease over the past three months, and a 20.8% decrease year on year.