IRVINE, CA-Sluggish office-investment metrics in Orange County do not reflect lack of appetite from buyers, but reluctance on the part of sellers to part with their assets, reports Voit Real Estate Services. The market has not approached the liquidity it enjoyed form 2003 through 2007 in dollar terms, and this liquidity may not return any time soon, according to the firm.

As GlobeSt.com reported earlier this week, Orange County office leasing velocity in all size ranges has fallen to an average of about 3.2 million square feet per quarter over the past year, down from about 3.6 million square feet per quarter in 2011, according to Voit. This trend will likely slow absorption in the near term. Also, the amount of sublease space available has also trended up over the past four quarters after steadily declining since 2008, which suggests that gray space may be on the rise, tempering the need for local tenants to lease more space.

As far as trading goes, Jerry Holdner, VP of market research for Voit, told GlobeSt.com earlier this week that “currently, there's a lot of money looking for quality assets. Therefore, pricing on those assets will continue to increase, which may motivate some owners to sell.”

Interest in top-quality Orange County office assets can be demonstrated by a couple of notable non-distress deals. Manulife Financial paid $516 per square foot for 3161 Michelson Dr. in August 2012, one of the highest price-per-square-foot deals ever recorded in Orange County, Voit reports. The well-leased property had last sold for $286 per square foot in 2009, and it was only 62% leased at the time of that sale. Also, in February of this year, Parallel Capital Partners purchased the Bixby Office Park in Seal Beach for $85 million, or $270 per square foot; the property had been foreclosed upon in 2011. Still, the infrequency of these deals reinforces the liquidity risk associated with Orange County today.