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Jay Nugent Jay Nugent

Office vacancy rates in Orange County increased again in the third quarter, making for seven consecutive quarters of increasing vacancy rates. As of the third quarter, vacancy rates is just above 12%, while absorption remained flat, according to research from Newmark Knight Frank. The increasing rate doesn’t quite tell the whole story. In 2017 and 2018 combined, 2.3 million square feet of new speculative office space came to the market, which has contributed to the increasing rate.

“Orange County’s vacancy rate has progressively increased as new speculative construction has come online and coincided with recent modest absorption activity,” Jay Nugent, senior managing director at Newmark Knight Frank, tells GlobeSt.com. “Historically, there is a notable time gap for leasing activity to catch up with new supply and tenants to subsequently absorb the speculative space. Over the past 12 months, 2.1 million square feet was delivered as new spec supply. To date, 67% of what has been delivered has been leased. In addition, one of the main factors could be that we are seeing historically low unemployment, which has caused white collar hiring to slow down.”

Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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