The Orange County office market continued to progress in the third quarter, extending a streak of positive net absorption to a year and a half.
The low-rise segment of the office market also led all building types on gross activity, with demand fueled by a combination of attractive lease rates and concessions.
The gains in net and gross absorption brought the vacancy rate for low-rise office space down to 13.8% in the third quarter from 14.1% the prior period and 14.9% a year earlier.
The North OC submarket had the best performance in the low-rise segment, followed by the Greater Airport Area and South OC.
The vacancy rate for low-rise office space in North OC declined to 12.1% from 12.6% the prior period and 16.7% a year earlier.
The area around John Wayne saw the vacancy rate fall to 12.7% in the third quarter from 13.1% in the prior period and 14.8% a year earlier.
The low-rise vacancy rate in South Orange County dropped to 16.3% from 16.7% in the prior period. That was a slight rise from 16.2% a year earlier.
The Central Orange County submarket had an increase in its vacancy rate, to 13% from 12.7% the prior period and 11.8% a year earlier.
The West Orange County submarket’s rate rose to 12.7% from 11.7% the prior period and 11.2% a year earlier.
The improvements in the overall picture was reflected in the countywide average asking lease rate for low-rise space, which held steady at $1.82 per square foot in the third quarter compared with the prior period. That halted a string of 14 consecutive quarterly declines.
The average asking lease rate fell by five cents from a year earlier, a relatively small dip that suggests growing optimism for the overall market.
Lease rates were varied by submarkets.
Central County saw its average asking rate increase to $1.53 in the third quarter, up two cents from the prior period and down three cents from a year earlier.
West Orange County’s average rose to $1.79, a four-cent gain from the prior period and a seven-cent pickup from a year earlier.
South Orange County saw an increase to $1.95, up a penny from the prior period and down two cents from a year earlier.
The Airport Area dipped to $1.76, down two cents from the prior period and by 10 cents from a year earlier.
North Orange County’s average asking rate fell to $1.84, down by a penny from the prior period and two cents off from a year earlier.
Burgner is a sales assistant for the Newport Beach office of CBRE.
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Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
