By SIMON DILLON
The West Orange County office market has been seeing increased leasing activity since the beginning of the year, which has spurred healthy increases in asking rental rates.
West County has the smallest of all OC’s office markets with less than 5 million square feet being tracked.
The greater John Wayne Airport area has more than 43 million square feet by comparison.
Asking rates increased more during the first quarter than all of the prior year. Vacancy declined from 16.8% to 10.7% in the quarter, versus a year earlier, and rates are expected to fall much lower based on current leasing activity.
Of the six cities that make up the West County market, Cypress is the most prominent, contributing about 2 million square feet of office space. Huntington Beach is the second biggest, with close to 1.5 million square feet.
Not only is Cypress the most significant city in the office submarket, it also is the “hot city” within the submarket. The tenant roster for Cypress reads like a “Who’s Who” of global companies.
Two recent leases are examples of Cypress’ importance: Germany’s Siemens AG took about 40,000 square feet and Ford Motor Co. signed for about 20,000 square feet. Both took space at Makar Properties’ Cypress Crossroads, one of the city’s top office parks.
The low vacancy rate in Cypress would be even tinier if the city’s large amount of owner-user buildings were considered in vacancy statistics.
If these buildings were considered as 100% leased buildings, the vacancy rate would be about 5% in Cypress.
Despite the recent decrease in vacancy and the strong increases in rental rates, West County still represents the best value for large office tenants in OC.
Dillon is a vice president in the Newport Beach office of CB Richard Ellis Group Inc.
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