By SIMON DILLON
The low-rise office market is improving at a stable pace, close behind high-rise and mid-rise buildings.
We have not seen a “spike” in rental rates in low-rise space yet.
But rents consistently are trending up.
We expect as occupancy levels continue to increase, rents will start to rise at a more aggressive rate.
An example of the appeal of low-rise office space is PS Business Parks’ Orange County Business Center, which is comprised of 500,000 square feet of office space.
Orange County Business Center is one of the few projects in the county that offers more than 40,000 contiguous square feet on one floor.
The expected increase in rents for low-rise office space has led to some recent sales with healthy pricing. Two notable low-rise projects that just recently traded are: Lakehills Corporate Park in Laguna Hills (a 240,000-square-foot office campus with six buildings), which sold for $220 to $230 per square foot by Pacifica Real Estate Group; and Alton Deere Plaza in the Irvine Business Complex in Santa Ana (a 447,376-square-foot, five-building complex), which sold for $180 to $190 per square foot by CarrAmerica Realty Corp.
Low-rise offices still represent a relatively good value for tenants seeking functional space with the convenience of surface parking (generally free) and efficient floor plates.
Dillon is a vice president in the Newport Beach office of CB Richard Ellis Group Inc.
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