Orange County Market Activity Stays Flat in Q4
- The Orange County office market continued to see slow activity in the fourth quarter as net absorption recorded just 48,800 square feet.
- 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 1.03 million square feet of office product under construction, all of which is expected to be delivered in 2020.
- The Airport Area accounted for the majority share of leasing volume for the quarter, accounting for 52% of all activity.
- The Orange County unemployment rate is among the lowest in the nation at 2.5%, down 20 basis points from last year. The largest annual job gains were recorded in leisure and hospitality services (+7,100) while financial activities (+3,200) recorded the second largest job gain.
Orange County Office Market:
The Orange County office market activity remained flat in the fourth quarter as tenant movement slowed while vacancy also remain unchanged at 13.8%. As tenants seek opportunities to right size and new construction delivers to the market, absorption gains are expected to be limited in the coming quarters.
Although fourth quarter saw a slowdown in market activity, the Orange County market is expected to maintain positive momentum as the local economy remains strong due to a growing highly skilled workforce. As new inventory delivers to the market in 2020 and tenants continue to make space efficient real estate decisions, absorption gains are expected to be limited in the coming quarters. Orange County will remain a highly desirable market for traditional FIRE tenants as well as technology and manufacturing users.