Overall Occupancy Fell by Another 1 Million SF
- The Orange County office market had four consecutive quarters of negative net absorption, with the largest loss in fourth quarter.
- After holding steady for three quarters, average asking rental rates decreased in fourth quarter for both Class A and B space.
- Vacancy increased the most in Class B buildings, up 90 basis points to 13.0%.
- Sublease space additions surged in the Airport Area. The Airport Area continued to account for most of the activity, making up 50.7% of fourth quarter leasing.
- The unemployment rate of 7.4% in December was still much higher than the 2.4% rate one year ago. The largest decline during this time period was in leisure and hospitality.
Orange County Office Market
Demand was at its weakest in fourth quarter on most fronts. Currently, 1.5 million square feet of sublease space is vacant and more than double that amount is available. Although there was much uncertainty in the previous quarters about the business impact of the pandemic, COVID vaccines are now being administered. When COVID cases start to plummet, office market fundamentals should begin to improve, driven by Orange County’s highly skilled and diverse workforce.