Orange County is the fourth largest office market on the West Coast and one of the top 30 largest office markets in the United States, totaling 101.5 million square feet. OC’s more affordable rents and robust demand have resulted in a large amount of construction, decreasing vacancy, and positive absorption. Approximately 54% of the 2.3 million square feet of office space under construction is preleased, and various business services, financial services and technology companies are driving demand for another 1 million square feet. The construction isn’t speculative but necessary to keep up with demand.
With very little supply added since 2008 and no new supply added to the market in the first quarter, demand remains strong in the supply-constrained market. Continued decreases in unemployment and positive, albeit weakening, job growth will continue to drive demand. New supply, accounting for 2.2% of the total market, is projected to have a minor impact on vacancy. Overall, new class A office product will propel rental rates and serve as another attractive option for current and future tenants in the market.
— Analysis provided by CBRE
