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5/06/19
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The Orange County office market ended 1Q 2019 in a strong position. The average asking rent rose to the highest level on record while the vacancy rate inched up with construction added to the inventory, according to the latest data from real estate services firm NAI Capital.
The average asking rent increased 1.1% over 4Q 2018 and 3.3% year over year to $2.78/SF. The vacancy rate was 10.0%, up 10 bps over the prior quarter as 343.1k sf of new construction was added to the market. Over half of the new office space delivered this quarter remained available.
The construction pipeline totaled 1.2 msf in 14 projects with 82.8% of the space available for lease. Several major projects totaling 625.7k sf broke ground this quarter. The largest construction project, The Press in Costa Mesa, is a 432.5k sf redevelopment to turn the former LA Times printing facility into a mixed-use creative office/retail space by 1Q 2020.
Orange County has the lowest unemployment rate in Southern California. According to the Los Angeles County Economic Development Corporation (LAEDC), Orange County will add 22,700 new jobs in 2019 – mostly in education & health and professional & business services sectors, which bodes well for the office market.
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