Orange County Office Report – Summer 2019
- Oct 17, 2019
Bolstered by Orange County’s affordable cost of doing business compared to neighboring Los Angeles, its office fundamentals remained strong throughout the first two quarters of 2019. Demand endured, pushing down the vacancy rate to 11.7 percent as of July. Additionally, coworking companies were attracted to the metro’s expanding office sector, leasing some 2 million square feet, equal to almost 2 percent of the metro’s office stock. WeWork recently signed a 52,500-square-foot lease at Granite Properties’ 100 Bayview in the John Wayne Airport submarket.
Growth in the metro’s office-using employment sector picked up the pace, and professional and business services added 8,200 jobs year-over-year through June. The sector accounted for 19.2 percent of total employment—more than any other sector in the metro. Meanwhile, jobs in the financial activities sector, which represents 7.1 percent of total jobs, decreased by 1.1 percent year-over-year through June, a loss of 1,300 positions.
Rising demand and limited availability of high-quality stock in the metro—such as the Irvine Business Complex and Irvine Spectrum— fueled expansion of development activity over the past two quarters. More than 1.6 million square feet have come online since the beginning of the year, and developers are expected to add another 204,500 square feet by year’s end. There was 625,400 square feet underway as of July, representing 0.6 percent of the metro’s inventory, as well as 245,300 square feet of owner-occupied office space under construction.