Representing almost half of Orange County’s total office space, the greater airport area consists of about 680 office buildings totaling 47.1 million square feet.
The area is the largest office market in OC, followed by South County with 22.7 million square feet and Central County with 16.6 million square feet of office space.
Average asking lease rates countywide continue to decline, dropping 5 cents to $2.14 per square foot in the first quarter. The nicest space fell the most significantly, with an 8 cent drop from the $2.40 asking rate at the end of 2009.
The greater airport area and South County experienced the greatest decreases in asking lease rates with a 7 cent drop to $2.24 in the airport area and a 6 cent decrease to $2.13 per square foot in South County. North and West County decreased to $1.99 and $1.94.
Of all the submarkets, Central County was the only area that did not see a decrease in asking rates in the first quarter, holding steady at $1.97 per square foot.
Office vacancy levels continue to increase, but at a much slower rate than in recent quarters. With 18.4 million square feet of vacant space, this brings the average vacancy for OC to 18.4%. Vacancy in the greater airport area remained unchanged at 19.5%.
Central County experienced the greatest increase to 19.3%. The remaining areas saw slight increases, leaving South County at 18.4%, North County at 15.7% and West County at 10%.
While almost half of sublease space is vacant, there’s slightly less than 3 million square feet of available space, which is better than the fourth quarter’s 3.7 million square feet.
Times are tough and the decrease in demand and rents are continuing to create opportunities for tenants and challenges for landlords.
Past history tells us that OC is creative, dynamic and entrepreneurial; the market continues to draw upon those attributes.
Snell is a senior vice president in the Newport Beach office of CB Richard Ellis Group Inc.
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