51.5 F
Laguna Hills
Thursday, Mar 28, 2024
-Advertisement-

OFFICE MARKET

Office Market

The Orange County office market continued its recovery in the third quarter, marked by positive absorption and stabilized vacancy rates.

Vacancy Rates

While the availability rate for office space dropped to 19.6% in the quarter, down from 20.4% in the previous quarter, the vacancy rate was virtually unchanged.

Positive net absorption of 294,344 square feet balanced out the 313,233 square feet of vacant shell space that entered the market as newly completed construction. That stabilized the vacancy rate at 15.6% vs. the June quarter’s 15.5%.

South County, which was hit particularly hard last year on a slower-than-expected tech recovery, had the greatest change in vacancy in the quarter, falling to 17.5% from 19.3% in the second quarter.

Net Absorption

It was the office market’s second consecutive quarter of positive net absorption. South County led the positive third-quarter activity with net absorption of about 345,000 square feet.

West County had 129,146 square feet of negative absorption, largely due to Sony Corp.’s consolidation and move into a 41,000-square-foot space at 5660 Katella Ave. in Anaheim from a 109,156-square-foot building at 10833 Valley View in Cypress.

Lease Rates

Average asking rents have remained stable despite the reportedly declining effective rates seen in OC’s office market.

The average asking lease rate dropped two cents to $2.08 in the third quarter, a decrease of less than 1% from the previous quarter.

Construction

Two new class A office projects were finished in the third quarter. They add 454,497 square feet to OC’s existing base.

One property, the 14-story second phase of Opus Center Irvine, was 45% leased at completion. The new Park Place building, a six-story, 148,000-square-foot property, came on line 100% vacant.

One project broke ground in the quarter. That’s the second phase of the Arbours Office Campus in Rancho Santa Margarita, a 62,258-square-foot complex.

Active office construction was 1.2 million square feet at the end of the quarter, just 35% of space under development at the same time last year.

Analysis provided by CB Richard Ellis’ Global Research and Consulting.

Want more from the best local business newspaper in the country?

Sign-up for our FREE Daily eNews update to get the latest Orange County news delivered right to your inbox!

-Advertisement-

Featured Articles

-Advertisement-
-Advertisement-
-Advertisement-
-Advertisement-

Related Articles

-Advertisement-
-Advertisement-