Expect So. County Office Activity in 2014

ALISO VIEJO, CA-Office leasing and trades will be largely focused on the Airport submarket and Central County next year, Blaine Annett and Colby Annett, co-managing partners of Stream Realty Partners, tell GlobeSt.com. The partners say South County has been the strongest submarket in Orange County, outperforming all of the other submarkets in the county.

One deterrent to growth in the leasing arena has been the lack of large blocks of space in South County. “Tenants are more focused in the Airport market, and we expect it to be the most active submarket in Orange County in 2014,” say the Annetts. “Investment capital, the brokerage community and the overall focus will be in the Airport and Central County next year.”

Central County, defined as the market near Anaheim and Angel Stadium, should be seeing a lot of investment activity later in the year since many office buildings in this market are for sale, the Annetts say. “Central County is for sale right now. There's a flood of capital in that market, what will be new ownership, and this will attract tenants to that market in late 2014.”

For the early part of the year, however, the Airport market will see more absorption, moving from 18.4% availability to roughly 12% during the year, the Annetts say. This includes direct vacancy as well as sublease space.

Not much spec development is anticipated in this market for 2014, given the relatively high availability of space. Construction in the office sector will be more along the lines of older stock being redeveloped and converted into creative space. “Owners will be trying to attract creative-office users, so there will be a lot of rehab and refurbishment,” say the Annetts. “But pure ground-up development we don't expect to see in 2014.”

As GlobeSt.com reported in November, Stream Realty Partners is overseeing extensive building improvements and rebranding for Von Karman Tech, formally known as Von Karman Business Park, located at 16842 Von Karman Ave. in Irvine. The two-story property is undergoing $1.5 million in renovations that include construction of creative-office spec suites, upgraded lobbies and common areas, and a new external business façade.