NEWPORT BEACH, CA—In addition to offering a great lifestyle, strong labor force, low vacancy rates and continued demand for newer product, the Orange County office market is viewed as a relative bargain compared to nearby West Coast markets, CBRE EVP Alex Hayden tells GlobeSt.com. According to recently released CBRE research, the most amount of new office development in the Greater Los Angeles/Orange County region is taking place in Orange County. We spoke with Hayden about the reasons for this development and what it might look like in the future.

GlobeSt.com: Why is office development for Orange County stronger than other nearby regions?

Hayden: The Orange County market provides a great lifestyle and has an extremely deep and talented labor force that is highly educated. With vacancy rates in the single digits, continued demand for newer product has shown, 'If you build it, they will come.' Additionally, the Orange County market is also viewed as a relative bargain when compared with Silicon Valley, West L.A. and many parts of San Diego, plus the presence of two large, former marine bases with lots of land have provided additional opportunities to add new, forward-thinking office space.

GlobeSt.com: Is the market likely to sustain this level of development for some time?

Hayden: Yes, we expect this level of new development to continue for some time. The market is seeing significant demand, and tenants have a substantial appetite for newer product that is more efficient and has character and a distinctive look since it helps to attract and retain the best talent in a very competitive job market.

GlobeSt.com: With the real estate cycle beginning to show signs of coming to an end, is all of this development a concern for Orange County?

Hayden: In past cycles, the market allowed overbuilding, which caused a glut of product in the mid-'90s, and then again between 2008 and 2012. The recovery has been more balanced this time around and has resulted in a more measured approach to adding product to the base. As a result, we have a much better balance that is being dictated by actual demand in the market. Additionally, the tenant base in Orange County today is more diversified and balanced across industries than ever before. Past recessions were led by a particular sector. This time around there is not one tenant type that occupies a significant portion of the office inventory.

GlobeSt.com: What else should our readers know about Orange County office development?

Hayden: The new product being built is very efficient, nicely appointed and in many cases accompanied by great amenities. The pricing scale has shifted up, and tenants need to examine the benefits of a new building alongside the cost factor. For several years during the great recession, cost was all anyone cared about. Recently, the discussion has centered much around recruiting and retention. I think striking a balance based on these criteria is the key to selecting the right fit.

GlobeSt.com: Why is office development for Orange County stronger than other nearby regions?

GlobeSt.com: Is the market likely to sustain this level of development for some time?

GlobeSt.com: With the real estate cycle beginning to show signs of coming to an end, is all of this development a concern for Orange County?

GlobeSt.com: What else should our readers know about Orange County office development?

Instant Insights /

How OC's Office Market Stands Out From the Pack

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