The Orange County high-rise office market is defined as buildings that are seven stories or taller. They are concentrated primarily in areas rich with amenities, and the high-rise office market is home to many high-profile companies looking for space in strategically visible and accessible areas. Corporate headquarters and law, accounting and financial-services firms are the basic types of tenants traditionally attracted to high-rise space.
The greatest concentrations of high-rise space in Orange County are in submarkets containing major amenities such as malls, hotels, restaurants or the airport. Sometimes referred to as the “unofficial downtown of Orange County” the Airport Office Area, the submarket within the Greater Airport Area directly surrounding John Wayne Airport, has 40% of the high-rise market alone. Aside from the airport, the landscape of the Airport Office Area is abundant with amenities such as hotels, restaurants, fitness centers and other support retail services within walking distance of the office space, making it easy for corporate tenants to bring in, entertain and house out-of-town clients and business associates.
South Coast Metro has 17% of the high-rise office base. The 3.6-square-mile submarket surrounds South Coast Plaza and includes the theater district and a variety of restaurants ranging from fine dining to fast food. The City submarket, which surrounds The Block at Orange, an entertainment-themed mall, accounts for 6% of the high-rise product in the county, as does the Town & Country submarket, adjacent to the Santa Ana MainPlace mall in Central Orange County.
Construction of new high-rise buildings is focused in these same popular areas. Nexus Development’s Twin Towers project (80% preleased) is across from Hutton Centre, sharing the amenities of the South Coast Metro submarket. Koll’s 1901 Main project is under development in the Airport Office Area, across the 405 freeway from JWA. Across the street is the Irvine Concourse, where Phase II of Opus Center Irvine, a Class A 14-story building (42% preleased) will break ground in May. The Irvine Concourse has amenities such as Sports Club/Irvine, the Embassy Suites and Crown Plaza hotels and a variety of restaurants and support retail services.
Rents for high-rise space are typically higher than those for low- or mid-rise office space. This is because of higher construction costs and the use of high-quality materials. High-rise space also provides tenants greater flexibility to grow or downsize when compared to large-floor plate, low-rise buildings whose floors cannot be divided easily.
Data and analysis provided by CB Richard Ellis’ Global Research and Consulting
