Municipal purchase on Vermont Avenue adds to city’s industrial holdings as market experiences rising vacancy
The City of Anaheim purchased an 87,531-square-foot industrial property at 522 East Vermont Avenue from Anaheim East Vermont for $22 million. The transaction priced at $251.34 per square foot, representing a municipal acquisition in Orange County’s North County submarket during the fourth quarter of 2025, according to a recently released industrial market report from Kidder Mathews.
Anaheim, with a population exceeding 350,000 residents, operates as Orange County’s largest city and maintains an extensive portfolio of municipal facilities supporting public services, operations and community programs. The city’s industrial holdings provide space for municipal operations, equipment storage and service delivery infrastructure across its 50-square-mile jurisdiction. Anaheim’s economic base encompasses tourism, convention activity, professional sports and advanced manufacturing, with major employers including Disneyland Resort and Angel Stadium contributing to the city’s fiscal capacity for strategic property acquisitions.
The acquisition occurred as the broader Anaheim submarket experienced challenging fundamentals, with direct vacancy reaching 6.1 percent at year-end and total availability climbing to 8.1 percent. The submarket, which encompasses 45.2 million square feet of industrial space, recorded negative net absorption of 165,614 square feet for the full year 2025, though leasing activity totaled 2.6 million square feet for the year.
North County, where the property is located, posted mixed performance with negative absorption of 191,569 square feet for the year despite positive fourth quarter absorption of 160,288 square feet. Direct vacancy in North County reached 5.5 percent while asking lease rates averaged $1.48 per square foot on a triple net basis at year-end.
Investment metrics across Orange County showed average sales prices of $310.50 per square foot in the fourth quarter while cap rates averaged 5.9 percent. Sale transaction volume totaled 929,773 square feet in the period, up 18.42 percent from 785,178 square feet in the same period of 2024, driven by price adjustments and the county’s high barriers to entry attracting continued investor interest.
The Anaheim submarket maintained asking lease rates of $1.57 per square foot on a triple net basis, above the North County average. Leasing activity in Anaheim totaled 154,806 square feet in the fourth quarter, with the submarket recording 2.6 million square feet of leasing volume for the full year despite the challenging absorption environment.
Orange County’s industrial market closed 2025 with direct vacancy climbing to 5.8 percent from 4.1 percent a year earlier as newly completed construction from 2024 and 2025 remained unoccupied. Asking lease rates declined to $1.49 per square foot on a triple net basis, down 6.29 percent year over year, as landlords adjusted pricing to attract tenants amid negative net absorption of 2.2 million square feet for the full year.
Kidder Mathews stated that smaller-format buildings continued leasing substantially faster than larger facilities during the quarter. Properties in the 5,000 to 9,999 square foot range maintained just 1.9 percent vacancy, while buildings in the 100,000 to 249,999 square foot category posted vacancy above 11 percent.
The construction pipeline included approximately 1.4 million square feet of space under development at year-end, with Tishman Speyer leading activity through its 379,168-square-foot Bake Freeway Business Park project in South County. Market stability is anticipated in 2026 as the number of active construction projects declines significantly from cyclical peaks, with developers delaying new project starts due to surplus supply concerns.
