Why Office Rents Are Heading Down

Office rents in Orange County may be heading down. According to research from JLL, the Orange County market has an increasing supply of large blocks of office space. Currently, the market has 60 blocks of at least 50,000 square feet of space, the majority of which is in the airport area of Orange County. The redevelopment of class-B office space is adding to the supply as well. While that is good news for tenants—who now have their choice of space—it could mean that landlords will be making allowances on rents. To find out more about this trend in the Orange County office market, we sat down with Jeff Ingham, senior managing director at JLL.

GlobeSt.com: Why is there such a surplus of large blocks of office space in Orange County?

Jeff Ingham: There has been a lot of market movement, and there has been some downsizing, not in terms of employment but in terms of how people are using space from an efficiency perspective. We have a lot of clients maintain headcount, but they are moving from an office environment to a cube environment. That is one piece of it. We also have had a lot of movement from the airport area to Irvine Spectrum market, and we are seeing movement from the airport area or airport adjacent companies to Santa Ana. That is putting a lot of space on the market.