The recovering Orange County office market appeared to lose momentum through the final quarter of 2013, according to a recent report from Studley. The firm says that regional hiring slowed and market dynamics became less fluid, creating a stagnant atmosphere for a market struggling to recoup its recession losses.
According to the report, which analyzed office-market conditions in the region, leasing volume declined to 7.1 million square feet in 2013—nearly 20% less than the long-term historical market average—from 9.1 million square feet in 2011 and 7.6 million square feet in 2012.
Users could take advantage of the slowed momentum in a number of ways. According to Royce Sharf, EVP and branch manager of Studley’s Orange County office, “While leasing velocity has slowed significantly, tenants seeking large, contiguous blocks of space are finding options limited, particularly in select submarkets such as Newport Center and Irvine Spectrum. As a result, an increasing percentage of major tenants are opting for renewals, although a build-to-suit or preemptive strike to backfill a ‘to be vacated’ property in a proposed development could be a rewarding opportunity for the right user...”
The creative-space trend, while not as popular in Orange County as in the more urban major markets, is beginning to grow here, with office space functionality, design and layout changing and the demand for “non-traditional” space increasing. Even more traditionally conservative tenants such as law firms, consultants and professional-services firms have begun to embrace these changes. As GlobeSt.com reported last week, while there has been a contraction in the mortgage-lending industry, other fields are taking over, with new tenants including a diverse mix of media, tech, financial, healthcare and residential real estate.Studley: OC Office Market is Stagnant
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Studley: OC Office Leasing Slows Down