Notable local companies have leased or listed part of their OC office base in the past year as they continue to be in a wait-and-see mode in the wake of the pandemic.
In July, the Business Journal reported firms like Hyundai Capital America, Acorns, Cylance and Vyaire were among companies looking to sublease their space. That trend has continued as more companies add to the region’s vacant inventory.
Irvine, Tustin HQ Availability
Among the more recent moves by local firms looking to shed some space, brokerage marketing data indicates, are Happy Money in Tustin and Kareo and WATG in Irvine.
More than 150,000 square feet is up for grabs among the three.
Tech-based personal finance company Happy Money inked a 72,000-square-foot lease at Tustin Legacy’s Flight office campus in 2019.
The deal is the largest that’s been made to date at Flight, and is more than twice the size of Happy Money’s prior headquarters in Costa Mesa.
The company is now looking to sublet part or all of its space, marketing materials from the local office of Cushman & Wakefield indicates. Deal options range between 15,000 and 72,000 square feet for the building.
Medical billing service firm Kareo is looking to sublease its 52,000-square-foot headquarters at the Park Place office complex on Michelson Drive in Irvine, records also indicate.
Like Kareo, hotel architect and design firm WATG is looking to sublet its headquarters in Irvine. The company in January put its 32,300-square-foot space at 300 Spectrum Center up for grabs.
Tech Industry
These three companies represent just a sampling of the new additions, with 1.6 million square feet of active office sublease space available, according to a February market update by brokerage JLL.
Total office sublease availability is up about 30% year-over-year. In addition to sublets, 470,000 square feet of available office space is expiring by the end of 2022, “potentially adding large blocks of space” to the market, according to JLL.
This increase in vacancy adds to mounting pressure for the office sector, one of the hardest hit product types during the pandemic.
Vacancy rates for high-end office space in OC stood around 16% at the start of the year, according to data from Voit Real Estate Services. For high-end space in the airport area, vacancy rates were nearly 18%.
The technology sector continues to lead industries in listing sublease spaces 10,000 square feet and greater in OC, according to JLL, with tech companies responsible for 43% of the active spaces added to the market so far in 2021.
