In the News
November 02, 2017
Office Market Remains Strong 3Q
Connect Commercial Real Estate
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The third quarter 2017 commercial real estate office market reports for Orange County reveal the market remains strong, as prices continued to increase, vacancy remained stable, and the amount of available space in the market increased.
Kidder Mathews expects the ongoing trend of positive absorption in the market to continue, along with consistent increases in occupancy costs. With larger office buildings on the way, a bump in inventory may apply some upward pressure on vacancy in the short run. Nonetheless, strong demand and consistent employment growth are expected to continue pushing growth.
CBRE reports vacancy rates increased due to added inventory, but the new space has helped push asking lease rates above prior peak levels. Lease rate growth has been exceptionally strong over the last year, especially among mid-rise buildings.
NKF notes Irvine Spectrum is becoming the metro's center of gravity. Rental rates in the Irvine Spectrum are at an all-time high and are among the priciest in the market; its average asking rental rate was up 26.7% from this time last year, and was 9.2% above last cycle's high in 2008. Rising rents have not dampened absorption gains: While the Spectrum contains only 10.7% of Orange County's CRE office stock, it has become the largest absorption-contributor, with 43.2% of the greater market's gains.
Click here to download the Orange County Office Market Report
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