Activity Ends 2018 On Positive Note
- The Orange County office market saw positive demand in the fourth quarter, recording 206,600 square feet of net absorption. Move-ins in the Airport Area and North County contributed to the growth in demand.
- Growth of asking rental rates slowed by increasing only $0.02 from last quarter to $2.89 per square foot (PSF) full service gross (FSG).
- The construction pipeline totals 1.3 million square feet, much of which is expected to be delivered in 2019.
- The Airport Area accounted for the majority share of leasing volume for the quarter, accounting for 60% of all activity.
- Orange County job growth increased by 7,700 jobs in the month of November. Largest annual job gains were recorded in professional and business services (+7,100) and educational and health services (+6,700). As of November 2018, the Orange County unemployment rate is still among the lowest in the nation at 2.8%.
Orange County Office Market:
The Orange County office market saw an increase in movement during the fourth quarter as leasing activity grew by 17% compared to last quarter. As tenants seek opportunities to right size and new construction delivers to the market, absorption gains are expected to be limited in coming quarters.
Moving into 2019, the Orange County market is expected to maintain positive momentum as the local economy remains strong. Although Class A asking rental rates are starting to stabilize, new developments coming online during the next year are expected to put upward pressure on asking rental rates. Orange County will remain a highly desirable market for traditional FIRE tenants as well as technology and manufacturer users.