Despite the overall positive news about the Orange County office market recovery, Studley reports that the office market is actually experiencing a lull in leasing activity as office-using employment numbers have shown minimal growth. The pace of leasing is about 1 million square feet below the average of the last five years, the firm reports.
In addition, class-A product is trailing leasing as calculated over a four-quarter basis, according to Studley. Leasing totaled only 4.3 million square feet in the third quarter, falling by 17.2% from the second quarter and 20.9% below its long-term average of 5.4 million square feet. At the same time, demand has shifted from class-A to class-B and –C product.
“Class-A availability, currently 20.6%, is nearly double the class-B and –C availability,” says Royce Sharf, EVP and branch manager of Studley’s Orange County office. “Still, much of the most-coveted space in highly desirable submarkets such as Irvine Spectrum, Fashion Island and the Airport Area has already been taken, and the number of large blocks of class-A space has tightened considerably.” At the end of the third quarter, there were only 10 blocks of class-A space of 100,000 square feet or more available, according to Studley.Studley: OC Office Leasing Slows Down
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