The high-rise market in Orange County ended the fourth quarter with steady demand, resulting in 271,620 square feet of positive net absorption.
Nearly all of the absorption—233,109 square feet—took place in the Greater Airport Area, which is where 76 of the high-rise buildings are located.
South Orange County ended the quarter with 78,989 square feet of positive net absorption.
OC’s year-to-date net absorption totaled 684,643 square feet, slightly lower than the 2014 annual total of 782,243 square feet.
The market’s vacancy rate is steadily falling and finished the quarter at 11%, representing a dramatic 21.3% decline from a year earlier.
The Central Orange County submarket experienced the steepest year-over-year drop in vacancy, decreasing 21% from the fourth quarter of 2014.
High-rise market asking rates increased 8.6% from the previous quarter and more than 18% from a year earlier.
The current average asking rate is $2.65 per square foot.
The previous low point of $2.08 per square foot came during the third quarter of 2012, and the last peak was $3.17 per square foot in the fourth quarter of 2007.
There is a still a ways to go in order to reach peak asking rates, though the Orange County office market has shown tremendous growth in rental rates over the past year.
The Greater Airport Area holds the highest asking rate in the region, ending the fourth quarter at $2.87 per square foot. The West and South Orange County both ended the quarter with an asking rate of $2.45 per square foot.
Overall market fundamentals have significantly improved and are showing signs of continuous acceleration.
We expect lease rates to continue to grow and vacancy rates to keep trending downward.
Tenant demand remains strong, and the Orange County office market is poised for a strong year.
Data and analysis provided by CBRE Research
