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Orange County Office Market Outlook 1Q 2018

05/01/2018
Published By: NAI Capital Research

MARKET OVERVIEW
In the first quarter of 2018, the Orange County office market demonstrated
solid signs of growth. Average asking rent climbed 8.5% over the year
to reach $2.69/SF- the highest rate on record. The vacancy rate jumped
up by 80 basis points over the year to 9.7%. This sharp increase in the
vacancy rate was the result of large volumes of new office product coming
online. Since 1Q 2017, more than 2.6 million SF have been delivered in
19 projects, with 80% of the space leased as of 1Q 2018. One million
SF was under construction at the end of the quarter and approximately
75.0% remained available at that time. Demand for office space in
Orange County has been driven by employment growth. According to
the California Economic Development Department, total employment in
Orange County grew by 31,900 jobs, or 2.0%, between February 2017
and February 2018 while the unemployment rate dropped from 3.8% to
3.1%. Office-occupying sectors added 18,800 jobs in the same period.
Broad-based employment gains in the Health & Education Services sector
created 9,200 new jobs over the year while the Professional &Business
Services sector added 8,900 jobs. These sectors were important drivers
of office demand in Orange County in the first quarter.

Release Date05/01/2018 - 11:51

Source

NAI Capital

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