After several years of market uncertainty driven by rising interest rates, shifting tenant demand, and cautious capital deployment, Orange County’s commercial industrial real estate market rebounded in a meaningful way in 2025. Total commercial investment activity surpassed $6.2 billion, marking the highest level of annual investment in three years and signaling renewed confidence among industrial buyers, sellers, and owner-users.
Rather than a broad-based recovery across all property types, capital has flowed decisively toward industrial assets, underscoring the sector’s resilience and long-term value proposition. As we move into 2026, understanding industrial-specific trends, and partnering with a brokerage that knows the South Orange County market inside and out, is critical.
Orange County Industrial Investment Market: Stability Returns
Industrial investment activity increased for the second consecutive year as pricing expectations between buyers and sellers aligned more closely. Improved visibility around interest rates and debt structures encouraged investors who had paused during the 2022–2023 volatility to re-enter the market.
Key drivers behind the rebound include:
- Greater certainty around borrowing costs
- Motivated long-term ownership groups
- Strong demand from owner-users and industrial tenants
- Structural supply constraints throughout Orange County
As a result, Orange County continues to attract regional and national capital seeking durable, income-producing industrial real estate.
Industrial Real Estate Dominates Commercial Investment Activity
The industrial sector accounted for more than $2.1 billion in transaction volume, representing over one-third of all commercial real estate investment in Orange County in 2025, the highest industrial share recorded in more than a decade.
This sustained momentum reflects the strength of industrial fundamentals relative to other commercial asset classes.
Why Industrial Remains the Most Compelling Investment
- Severely limited land availability: Orange County is largely built out, significantly restricting new industrial development and supporting long-term pricing stability.
- Strategic location: Proximity to the Ports of Los Angeles and Long Beach makes Orange County, particularly South County, an essential hub for logistics, manufacturing, and distribution.
- Broad tenant demand: Aerospace, medical, technology, defense, light manufacturing, and service-oriented users continue to drive leasing activity.
- Infill advantage: Smaller-format industrial buildings under 50,000 square feet remain highly sought after by both investors and owner-users.
Even as vacancy has increased modestly due to recent project deliveries, well-located industrial properties continue to lease efficiently and maintain strong valuations, especially within South Orange County submarkets such as San Clemente, Lake Forest, Mission Viejo, Rancho Santa Margarita, and San Juan Capistrano.
Office vs. Industrial: Capital Chooses Certainty
While office investment activity showed limited improvement toward the end of 2025, industrial real estate continues to outperform due to its operational necessity and tenant stickiness. Investors favor industrial assets for their:
- Lower tenant improvement costs
- Shorter downtime between leases
- Greater adaptability to evolving business needs
These characteristics make industrial properties especially attractive in an environment where capital discipline and cash-flow certainty matter more than ever.
Why Local Industrial Expertise Matters More Than Ever
In today’s selective investment environment, deep local knowledge is not optional, it’s a competitive advantage. Micro-market dynamics, zoning regulations, building functionality, and tenant demand can dramatically impact value and performance.
This is where Johnston Pacific Commercial Real Estate stands apart.
Johnston Pacific: 35 Years of Industrial Real Estate Leadership in South Orange County
For more than 35 years, Johnston Pacific has specialized exclusively in industrial and commercial real estate throughout South Orange County. Our team has guided clients through multiple market cycles, interest-rate environments, and economic shifts, providing clear, strategic direction rooted in local experience.
Our long-standing relationships include:
- Industrial property owners
- Private and institutional investors
- Owner-users and operators
- Developers and lenders
This network allows us to identify opportunities early, price assets accurately, and execute transactions efficiently.
Whether you are acquiring, selling, or repositioning an industrial property, Johnston Pacific is the go-to brokerage for industrial property investment in South Orange County.
Industrial Outlook for 2026
As we look ahead, the fundamentals supporting industrial real estate in Orange County remain firmly intact.
Key Industrial Investment Trends for 2026
- Continued investor focus on infill industrial assets
- Strong demand for owner-user buildings
- Limited new supply reinforcing long-term value
- Increased activity among private capital and local buyers
For investors seeking stability, income, and long-term appreciation, industrial real estate remains the cornerstone of commercial investment strategies in Orange County.
Partner with Johnston Pacific
If you are considering an industrial real estate investment in South Orange County, now is the time to work with a brokerage that understands the nuances of this market.
Johnston Pacific Commercial Real Estate
✔ 35 years of experience
✔ Industrial specialists
✔ Deep South Orange County expertise
We help our clients navigate today’s market with confidence, and position their industrial portfolios for long-term success.
