Don’t Fret Over Central OC Office Performance

Scott Wetzel

The Central Orange County office market has had an anemic start to the year. The market lost two large tenants to the Airport Area and has had negative absorption of 67,741 square feet—down 35 basis points, according to research from JLL. It isn’t all bad news. Orange County office leasing, in general, has been flat this year, so the Central OC market is on trend. Even better, rental rates have continue to rise and the vacancy rate is down nearly a full percentage point year-over-year.

“2018 year-to-date net absorption is only down 35 basis points, so it’s unfair to say Central County has experienced any significant negative absorption.  Two large tenants, AAG and UFC Gym, who together account for 82,000 square feet, both relocated to the Airport Area,” Scott Wetzel, VP at JLL, tells GlobeSt.com. “Still, it’s important to note that year-over-year vacancy rates lowered from 13.1% to 12.3%  and rental rate growth remains strong.  Over the past 12 months, average asking rates have increased nearly 13%.  This is a healthy sign for the Central County submarket, especially in contrast to Orange County’s most prominent submarket, the Airport Area, where rental rates are starting to plateau as double-digit rent growth has ticked down to the high single-digits.”