The co-working trend is finally hitting Orange County. Duringthe final quarter of 2018, Orange County saw an increase inco-working leasing activity, according to a new market report fromNewmark Knight Frank. During the same period,however, direct office leasing absorption slowed, down 74.7%year-over-year. Despite the slow down in leasing activity,absorption remained positive for the eighth consecutive quarter,driving the vacancy rate down slightly to 12%. Co-working userssigned major leases throughout the year, with WeWork taking up150,000 square feet in the market and Regus picking up anadditional 62,000 square feet.

“In addition to the co-working trend happening all across theUS, I believe the primary reason it is increasing in our market hasbeen the incredible success of the existing co-working operationsthat have come to Orange County,” Jay Nugent,senior managing director at Newmark Knight Frank, tellsGlobeSt.com. “I know the two biggest,  WeWork as well asSpaces, have achieved very successful lease up rates at thelocations that have opened and those locations have performedbetter than projected.  This has given them as well astheir competitors confidence that this Orange County region rightnow is “under supplied” as it relates to co-workingspace.   It is simple economics, when you are ator close to 100% leased the only way to drive more revenue is toopen up more locations and that is what we are seeing.”