Orange County office market reports
The Orange County office market continues to experience a positive increase in touring activity at a slow but steady pace to start the year from tenants that had previously held off their office leasing search due to the COVID-19 pandemic. Employers are now eager to capitalize on the generous concession packages and flexible terms offered by landlords to accommodate their return-to-work policies.
The inventory for Orange County has remained consistent at around 130 million square feet for the last year. An increase in deliveries during the coming years will cause this number to increase as developers continue to expand on new developments throughout the various submarkets.
Orange County experienced quarter-over-quarter negative absorption as companies continue to downsize. There was positive absorption reported for the first time in 6 quarters of 664,025 sf in Q4 2021.
Direct Asking Rent
Average FS asking rents declined in 2021 but remained stable during the year ranging from $2.62 psf to $2.66 psf during 2021. Pricing remained in that range at the start of 2022, with an average FS asking rate of $2.63 psf at the end of Q1 2022. Lease rates were the highest in the South Orange County submarket, with an average asking rate of $2.76 psf.
The total available office space checked in at just under 23 million sf for the Orange County office market. Landlords are being more aggressive to lure prospective tenants back to the office by offering flexible lease terms, competitive rates, and attractive tenant improvement allowances.
Vacancy trended upwards by 90 basis points in Q1, although we are seeing an increase in tour velocity, which may put downward pressure on vacancy going forward. The direct vacancy rate and the sublease vacancy rate both increased to 13.5% and 2.6% of the total market inventory, respectively.
The average sales price in Q1 2022 was $385 psf, this is an increase of 18.5% when compared to Q1 2021 when office buildings were trading for $325 psf. Investment sales volume has been trending upwards since the start of 2021. This continued growth pattern of the average sales price psf and activity throughout the year indicates an active investment office sales market for Orange County.
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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