At the end of 2009, Orange County was considered one of the hardest hit office markets.
Although we still have a way to go, the improvement in fundamentals in the past year or so is encouraging, including positive net absorption and decreasing vacancy.
The South Orange County office market is the second largest submarket here with about 23 million square feet.
The greater John Wayne Airport area is the largest submarket with about 47 million square feet.
While South Orange County is about half the size of the airport area, it actually saw a positive net absorption number that exceeded that of the airport area.
There are a few notable factors.
First, South County tenants are comprised largely of medical, healthcare, technology, video game and other entrepreneurial companies.
Companies in these industries actually are hiring and leasing more office space.
Examples include Blizzard Entertain-ment, the online video game company based in the Irvine Spectrum, which expanded into another 100,000 square feet last year.
Wonderware, a software company in Lake Forest, expanded last year for a total of 150,000 square feet.
In Aliso Viejo, UST Global Inc. and Avanir Pharmaceuticals Inc. signed leases at the latest phase of The Summit Office Campus.
Both tenants are going from 20,000 square feet to about 30,000 square feet.
Another notable factor contributing to the positive fundamentals in South County is the overall quality of life and educated workforce in the area.
Once companies see what South County has to offer, relocating or remaining in the area often is an easy decision.
Bio-Rad Laboratories Inc., which now occupies 95,000 square feet, renewed and expanded within the Irvine Spectrum at the end of last year.
Aleks Corp. is yet another company that chose to move and expand into 53,000 square feet in the Irvine Spectrum.
Although our forecasts show another 18 to 24 months with no rent growth, it seems we are on the road to recovery, albeit early in the process.
Schneider is a senior associate in the Newport Beach office of CB Richard Ellis.
The Real Estate Watch Chart
Net Absorption, Rates, etc. is provided in a Adobe Reader .pdf print-friendly file.
