OC Apartment Development Roars in Business District
The Airport Area of Orange County is leading the market for new multifamily construction.
“Orange County’s workforce is growing, the most recent June update from the California EDD shows the county’s nonfarm employment at 1,673,100, the largest on record,” Jared Dienstag, research manager at JLL, tells GlobeSt.com. “Many of these employees are millennials and prefer to live in multi-family housing. In the last 10 years, Orange County’s workforce has increased by 282,500, or 20 percent. As Orange County’s primary business district, it is not a surprise that multi-family development has been rampant in the area with people looking to trim daily commutes, so they have a short drive, or even bike or walk to work.”
The development activity in the submarket accounts for nearly a quarter of the total multifamily new construction in all of Orange County. “Majority of the projects in the Airport Area that have recently been completed or are currently under development have replaced obsolete commercial buildings, this is a trend that is occurring throughout Orange County,” says Dienstag.
Most of the new product in the pipeline is mid-rise and targets renters looking to work in the bustling surrounding office market. Ultimately, the area is developing into a live-work-play market,” says Dienstag. “New multi-family developments are aiming to offer as many amenities as possible to make their tenants’ lives more convenient and enjoyable. Amenities from the previous generation of apartments included pools, entertainment/game rooms, business/conference centers, and fitness centers. These have not gone away, but now new projects can include pet spas, ride sharing waiting areas, golf simulators, concierge services at extra cost, collaborative work spaces, and now gyms come with indoor and outdoor facilities.”
The demand for housing also justifies the new supply coming to the market, and Dienstag believes that it will be absorbed. “In order for Orange County’s economy to continue to expand, we need innovative companies and organizations to have a presence in the market, and in order for them to be successful they need highly skilled and educated employees, and these employees need places to live,” he says. “Ideally this increase in population and multifamily housing will bring additional retail and entertainment amenities to the area because that is a big piece to the greater puzzle. Despite the greater supply of units and rising rents, the number of people preferring to live in multifamily properties continues to grow which is helping to fill occupancy. Additionally, much of the new supply is providing more landlord diversity in the market.”