The number of available blocks of office space in Orange County that are 50,000 square feet or greater increased from 60 to 66 quarter over quarter, according to a report from JLL. In addition, large-block office leases in the market were signed by tenants from a diverse set of industries, the firm reports.
OC was hit hard by the recession 10 years ago, largely because the market was highly dependent n the financial-services industry (mortgage companies in particular). But since then, the local economy has become extremely well diverse, showcased by recent leasing activity. Tenants that signed large leases during Q2 include Anduril (technology), State of California (government), Coviden (medical technology), Acorns (fintech), CNI College (education), and Hoag Memorial (healthcare). JLL says this diversity of economy bodes well for the local labor pool and provides landlords with a strong mix of companies to attract and retain as tenants.
Six additional blocks of available office space 50,000 square feet or greater throughout the market in Q2 as compared to Q1 despite an uptick in leasing activity, JLL reports. The added spaces are primarily in Central County, and there are an additional 10 blocks of available space in buildings that are currently under construction or renovation. Of the 66 spaces, 36 are located in the Airport Area, while a majority of the spaces are in class-A properties. Tenants looking for large blocks of space will continue to have multiple options throughout the year, according to JLL.
Employment figures for OC are promising as well. JLL reports that in both April and May, the market had an unemployment rate of 2.6 percent, representing the lowest level since December 1999. According to the California EDD, OC added 17,300 jobs over the last 12 months, and jobs are being created despite the tight labor market, indicating businesses are in expansion mode.
Although companies are looking to implement more space-efficiency practices, they are also adding headcount and forecasting growth, which is driving leasing activity in the market, says JLL. Theses are necessary key elements for the market to experience sustainable growth.