One of the most affluent cities in Orange County, California is Irvine. As a planned city, it was first developed in the 1960s by the Irvine Company, thus its name. It was incorporated in 1971 and in 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 highest Asian American plurality. In fact, some 45% of the population falls under this demographic. The city has a lot of industries and these include those in the semiconductor and technology fields.
Irvine Warehouse Building for Sale & Lease – Should You Buy or Lease?
If you are interested in warehouse buildings, be that as an investment or for use in your business, you have two broad options available to you: buying or leasing. Naturally, there are advantages and disadvantages to be considered for both of these options.
Looking first at buying warehouse space, the pros include:
- The fact that your costs are fixed, which means that your business expenses with regards to the warehousing property are practically constant.
- That you can file for substantial tax deductions, including property taxes and mortgage interest.
- That you can rent out some of your space out in the event that you need cash inflow.
- That you can build up substantial savings, as the property is likely to appreciate over time.
However, the cons are substantial as well and include:
- Not having a lot of flexibility – if your business contracts or grows, you may have to sell the property sooner than you expected.
- Having high upfront costs – you need to pay at least 30% of the purchase price of the warehouse as down payment. You will also need to take care of maintenance, appraisal, and other property costs.
Your other option is to lease your warehouse space, which also has some benefits, including the fact that:
- You have more working capital available because you don’t have to pay for a large down payment.
- You can focus on actually running your business, rather than on the stresses of property ownership.
However, there are some downsides as well:
- Your costs are likely to rise over time because of regular rent increases.
- You do not build up any equity in the property, since you don’t own it.
To help you select between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, can help.
Irvine Warehouse Property for Sale – Trends and Statistics
- The selling price for warehouse 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 warehouse properties for sale in the Los Angeles-Long Beach-Irvine area 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 warehouse 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 warehouse 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 warehouse 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 Warehouse Property for Lease – Trends and Statistics
- The current rent for warehouse 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 warehouse 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 warehouse 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 warehouse 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.