The inventory of office space in Orange County is tightening.
Low-rise office buildings account for about 55% of Orange County’s office space, comprising about 55 million square of a total 99,888,299 in the market segment. There are roughly 1,540 low-rise office buildings in OC, compared to 124 high-rise and 173 midrise office buildings.
The overall vacancy rate for low-rise office buildings fell to 12.1% at the end of the third quarter; it had been 12.5% at the end of the second.
The low-rise vacancy rate in OC has declined for the last nine quarters. That’s been due to positive absorption and lack of new construction.
Low-rise office projects had another positive quarter of absorption totaling 148,802 square feet during the third quarter.
The year-to-date absorption—when combined with the 559,724 square feet absorbed in the first two quarters—totals 708,526 square feet.
The average asking lease rate is currently $1.78 per square foot. That was down from $1.82 per square foot at the same time last year.
Many businesses are looking to achieve cost savings by taking advantage of the lower lease rates and incentives being offered in the low-rise segment.
Vacancy was the lowest in the Greater Airport Area submarket, at 10.8%, in the third quarter. That was down from 12.5% recorded a year earlier.
The South OC vacancy rate declined to 12.3% in the third quarter, while Central and North OC vacancy rates declined to 14% and 11.9%, respectively. West OC vacancy jumped 1%, to 17.1%.
There was positive absorption of low-rise office space during the quarter in all submarkets except the airport area and West OC; they had negative absorption of 51,436 square feet and 29,105 square feet, respectively.
Pincott is a vice president in the Orange office of CBRE Group Inc.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
