Collaborative Office Space is Here to Stay

IRVINE, CA—Panelists at RealShare Orange County are bullish on creative-office space since the demand for this product type has hit the region and there’s a definitive lack of supply. During the “OC Office: The Great Bounce Back” panel, speakers touted the longevity of collaborative space and the importance of designing office space around the people using it, which results in increased productivity and—after the initial outlay—ultimate cost savings.

Moderator Greg May, EVP and managing director of Newmark Grubb Knight Frank, called the bounce back an “upcoming bounce back,” but panelists were overall optimistic about the office sector’s current strength here. Kevin Mitchell, VP of Cresa Orange County, said employment growth will continue to rise past 2006 levels, so there will be a need for new office space between now and 2017 with significant new construction beginning to kick up by late 2015. He said vacancy rates are expected to be in the single digits by mid-’15, and asking rental rates will continue to rise as concessions are reduced. The bid/ask spread on lease rates will narrow, and tenants are willing to pay a premium for high-quality, well-located office space.