Orange County office market reports
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Reopening efforts and vaccination rates in Orange County have been significant drivers of the recovery helping to improve employment trends and the countywide business climate. Despite the rebound in the economy, office tenants view office space differently in this post-COVID environment as we continue to see a rise in vacancy and sublease activity. The long-term effect of the pandemic has yet to be fully determined, because the new prevailing utilization strategizes around Covid-19 compliant work environments are still unfolding as companies “re-strategize” their space usage for return to work operations.
A push for increased vaccination rates have allowed for greater reopening efforts, enabling the Orange County unemployment rate to rebound from a high of 14.9 percent in May 2020 to 6.2 percent in April 2021.
Post-COVID office-using job losses have totaled 3.3 percent compared with leisure and hospitality job losses that totaled 18.1 percent, underscoring the disproportionate impact the pandemic had on the discretionary segments of the local economy.
Post-pandemic leasing activity decreased by an annualized rate of 37.9 percent compared with the prior 20-year annual average as office occupiers focused on return-to-work efforts before strategizing their long-term occupancy plans.
The number of lease transactions in Q2 2021 increased by 9.6 percent from the same period one year prior.
The total vacancy rate in Orange County was 13.7 percent in the second quarter of 2021, which is nominally higher than the 2000 to present average of 12.1 percent and remains lower than the post-millennium peak of 17.3 percent from the Global Financial Crisis.
The sublease market accounts for 2.0 msf of vacant space, which has not surpassed the scale of sublease vacancy of 2.4 msf that was reported following the burst of the Dot-com bubble.
Asking rents decreased by 0.2 percent quarter-over-quarter in June 2021, as compared to 4.4 percent year-over-year signaling that the rent drop is subsiding. Demand is picking up as office occupiers return to work and tenants that postponed their real estate decisions re-enter the market.
Deal volume has been slow to return to pre-COVID levels. Orange County office dollar volume has totaled just $2.4 billion since the beginning of 2020, which represents an annualized decrease of 72.0 percent compared with the previous five-year average.
Your source for the latest Orange County office market reports
Get in-depth office market reports and insights from commercial real estate experts in the Greater Orange County area. Avison Young advisors look at Orange County's commercial real estate activities and the latest area statistics to provide you expert market research on Orange County's office properties.
Explore different topics like the latest office market pricing trends and analysis of Orange County's current office real estate market conditions. Gain a better understanding of the area’s office real estate outlook and stay ahead of current office space trends. Make smart decisions when it comes to investing in office properties in Orange County's competitive office real estate market. Avison Young is your trusted source for commercial real estate office market insights in the area.
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