ORANGE COUNTY, CA—Class-A office towers and cutting-edge, creative low-rise buildings are in store for the Orange County market, Voit Real Estate Services' VP of market research Jerry Holdner tells GlobeSt.com. After the release of the firm's research department's mid-third-quarter reports, we spoke exclusively with Holdner about his expectations for both the office and industrial sectors here.

GlobeSt.com: Can you expound on some of the factors leading to weak Orange County office absorption so far in the third quarter?

Holdner: The office market has been on a great run, posting over 3.2 million square feet of positive absorption in the last five-and-a-half quarters, and occasionally the market has to take a pause. During the first quarter, we had a couple of companies like Verizon Wireless and AT&T give some space back, but keep in mind that in the fourth quarter of 2014, we experienced more than 1.2 million square feet of positive absorption, the most positive absorption we've seen in a quarter since the second quarter of 2005. Typically, the start of the third quarter is a bit slow due to summer vacations and/or people taking time off work. The third quarter is usually strongest in the second half of the quarter, so look for the numbers to improve.

GlobeSt.com: What type of speculative office construction do you foresee for Orange County moving forward?

Holdner: Demand growth for the first half of 2015 has been solid, due to several large office projects that have been delivered. Moving forward we are going to see more class-A office towers constructed as well as cutting- edge creative low-rise office buildings. We will also continue to see adaptive/re-use projects by several of the top developers in Orange County.

GlobeSt.com: How can developers keep pace between the supply of large amounts of contiguous industrial space and demand for the same in Orange County?

Holdner: When it comes to large blocks of industrial space, most developers are going east to the Inland Empire as it is becoming more difficult to find large parcels of land in Orange County suitable for industrial. There are a couple of larger projects under construction in North Orange County, including Panattoni's final phase of the Anaheim Concourse, featuring 482,000 square feet in six buildings, as well as Pacific Industrial and Clarion's Imperial Distribution Center, a class-A, 367,000-square-foot distribution building on 18 acres on Imperial Highway in Brea. While Orange County has a very diverse industrial base and tenant/user demand is currently outpacing supply, land values have risen to the point where multifamily developers are the only ones able to make sense of the economics, which has led to more residential space being constructed in the infill markets than industrial in recent years.

GlobeSt.com: What else should our readers take away from your mid-quarter report about office and industrial in Orange County?

Holdner: We are running into a supply problem in many size and types of available space, which will continue to put upward pressure on pricing going forward, in both office and industrial. We will continue to see construction of new buildings and/or adaptive/re-use projects in the foreseeable future. The bottom line is it's a great time to be a seller.