Orange County Market Activity Flattens in Q3
- The Orange County office market saw a slowdown in demand, recording 91,100 square feet of net absorption. Demand in all submarkets saw a slowdown during third quarter.
- Asking rental rates recorded no change from last quarter, remaining at $2.95 per square foot (PSF) full service gross (FSG).
- Orange County currently has 502,500 square feet of office product under construction, all of which is expected to be delivered by the end of 2019.
- WeWork continued to expand its footprint in Orange County by signing two additional leases in Irvine Spectrum for 116,261 square feet and in the Airport Area for 74,926 square feet.
- The Orange County unemployment rate is among the lowest in the nation at 3.0%, down 10 basis points from last year. The largest annual job gains were recorded in leisure and hospitality services (+7,600) while educational and health services (+3,900) recorded the second largest job gain.
Although third quarter saw a slowdown in market activity, the Orange County market is expected to maintain positive momentum as the local economy remains strong. As new inventory delivers to the market at year end and tenants continue to make space efficient real estate decisions, absorption gains are expected to be limited in the coming quarters. However, positive demand will still be seen by co-working companies as they continue to expand their footprints. Orange County will remain a highly desirable market for traditional FIRE tenants as well as technology and manufacturing users.