Orange County Office Market
Vacancy experienced its largest quarter-over-quarter drop since the pandemic but remains elevated by historical standards. Total vacancy was 18.0%, 260 bps above the five-year average. Net absorption was positive for the fourth quarter in a row, totaling 265,662 SF in net gains. The largest move-in of the quarter was by Axonics Inc. occupying its new 145,960-SF space in the Irvine Spectrum. Muted office demand is prompting developers to scrap planned office projects, leaving the construction pipeline empty for the first time since the Global Financial Crisis in 2008. The Irvine Company changed course from building a 532,000-SF life science campus at UCI Research Park to a 1,200-unit apartment complex, while the owners of OCV!be, the mixed-use mega-development in Anaheim, recently revised plans to replace office structures with additional housing.
Download Orange County Office Market Report 2Q24
Orange County Industrial Market
Current leasing activity is subdued relative to 2021-2022. After five consecutive quarters of net losses, the market experienced a modest net absorption gain of 41,271 SF this quarter. A stream of tenant departures and downsizings contributed to the rise in vacancy to 3.9%, the highest it has been in nine years. 912,789 SF of available sublease space was added this quarter as tenants continue to reassess space needs. Sublet availability will fluctuate in the quarters ahead. Under-construction activity increased to 2.1 MSF after six projects broke ground, while six others totaling 687,391 SF delivered. The new construction starts brought down pre-leasing levels to 10.3% of overall construction.
Download Orange County Industrial Market Report 2Q24