Orange County Office Market Report

South County spearheads initial turnaround. After five straight quarters of negative net absorption, Orange County’s office sector returned to positive territory in the April-June period. Class A leasing was to credit, with tenants absorbing a net of 240,000 square feet of this space over the three-month interval. A flight-to-quality was most apparent in South County, which includes Irvine Spectrum. Here, Class A vacancy fell 210 basis points in the first half of 2023. More impressive, the area entered July on a five-quarter streak of positive upper-tier absorption, potentially fueled by an average asking rent that is more than $5 per square foot below its prior peak. This momentum and a lack of traditional office space in the local pipeline indicates properties with significant chunks of available square feet may receive more interest from prospective tenants.