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Market Report

Orange County Office Market Report

2Q 2022

Class B/C Leasing Improvement Mitigates Overall Vacancy
Increase and Revives Deal Flow

Subsector fundamentals contrast. Hybrid work adoption by major office users and a near record volume of available Class A space has Orange County's office sector in a state of transition. Nevertheless, reasons for optimism are emerging. Demand for lower-cost floor plans has recently improved, with tenants absorbing nearly 1.2 million square feet of Class B/C space during the 12-month period ended in March. Low- and mid-tier leasing has been most pronounced in the Airport Area and South County, activity that has placed subsector availability below its long-term average. An additional positive for the metro, the number of traditional office-using positions is expected to reach a record mark this year. Upcoming staff expansions have the potential to increase some firms' office requirements despite flexible, in-person work schedules.
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