Market Activity Starts 2019 On Positive Note
- The Orange County office market saw positive demand in the first quarter, recording 323,300 square feet of net absorption. Move-ins in the South County and the Airport Area contributed to the growth in demand.
- Growth of asking rental rates slowed to increase only $0.02 from last quarter to $2.91 per square foot (PSF) full service gross (FSG).
- Orange County currently has 1.5 million square feet of office product is under construction, all of which is expected to be delivered in 2019.
- The Airport Area accounted for the majority share of leasing volume for the quarter, accounting for 56% of all activity.
- Orange County job growth increased by 7,600 jobs in the month of February. Largest annual job gains were recorded in professional and business services (+9,400) and educational and health services (+5,300). The Orange County unemployment rate was still among the lowest in the nation at 3.0%.
The Orange County office market continued to see positive movement during the first quarter due to many large move-in's in South County and the Airport Area. Although demand recorded positive, vacancy increased by 20 basis points due to 340,000 square feet of new inventory being delivered to the market.
Moving through 2019, the Orange County market is expected to maintain positive momentum as the local economy remains strong. Although Class A asking rental rates are starting to stabilize, new developments coming online during the next year are expected to put upward pressure on asking rental rates. Orange County will remain a highly desirable market for traditional FIRE tenants as well as technology and manufacturer users.