Orange County Office Report – Fall 2019

With vacancy compressing and development picking up steam, the sector is entering 2020 in good shape.
Office-using employment in Orange County, click to enlarge
Office-using employment in Orange County, click to enlarge

Driven by a modest stock of high-quality space, a low cost of doing business and spillover impacts from Los Angeles, office demand remained robust in Orange County between January and October 2019. Aided by funding from the Transportation Corridor Agencies, Caltrans is set to build a bridge connecting Orange and Riverside counties. The estimated $180 million project—aimed at easing traffic on the 91 Freeway Lane and helping residents who live in the Inland Empire but work in Orange County—could be completed as early as 2023.

READ THE FULL YARDI MATRIX REPORT

Employers added 21,500 jobs in the 12 months ending in September, with almost half of that comprising office-using positions. The professional and business services sector expanded by 7,500 jobs, a 2.4 percent increase year-over-year. Job growth was also robust in leisure and hospitality (6,100 jobs) and in construction (3,300 jobs).

Employment growth by sector in Orange County, click to enlarge
Employment growth by sector in Orange County, click to enlarge

Construction activity picked up in 2019 with 1.7 million square feet completed through October, up 260 percent year-over-year. Demand for high-quality space remains high, and developers continue to focus on submarkets with a low availability of Class A supply. Orange County’s overall vacancy rate stood at 11.6 percent as of October, down 220 basis points year-over-year. Coworking companies continued to sign the largest leases in the market, with WeWork leasing more than 300,000 square feet in 2019. In total, shared office space providers absorbed more than 465,000 square feet in the metro last year through October.

Read the full Yardi Matrix report.