MARKET DRIVERS
In 3Q 2025, Orange County’s office market outperformed many U.S. counterparts. The direct vacancy rate declined slightly year-over-year from 12.3% to 11.8%. Class A, amenity-rich developments like Spectrum Terrace and Innovation Office Park are thriving and remain in high demand. Some older high-rise buildings have also seen occupancy recovery as tenants seek affordable options, amenities, and strategic locations.
The average asking rent has decreased slightly to $2.77 per square foot for full-service leases,
a 1.07% annual decline. High-quality space is around $3.20 per square foot to draw in tenants,
which includes big discounts, tenant improvement allowances, and complimentary parking.
ECONOMIC REVIEW
Orange County’s economy is expanding at a measured but steady pace, fueled by growth healthcare, technology, and logistics fields. These gains are helping offset the downturn in the financial services and construction sectors. Redevelopment remains a key strategy as many older suburban workplaces are either moving or being repurposed.
Orange County’s infrastructure stays strong, even with the difficulties in the labor market. To remain competitive, landlords are responding by providing attractive tenant improvement options, better amenities, and adaptable lease options. Leasing decisions will continue to be influenced by factors including location, longevity, and adaptability through the end of 2025.
NEAR-TERM OUTLOOK
The market is expected to remain stable but cautious through year-end. Overall availability will likely stay limited as older suburban office parks are redeveloped into mixed-use projects, and new office construction remains muted, with only about 400,000 SF currently underway.
While the reuse of less desirable suburban properties remains a notable trend, the spotlight is shifting to high-end modern offices and innovative campuses. Increased investor activity at lower prices signals optimism that values may be bottoming out. Compared to other California markets, Orange County stands out as one of the strongest, driven by demand for premium space and tightening availability—despite persistent vacancies in older buildings.
3Q 2025 Orange County Office Market: Key Data Points
Explore our full Orange County industrial market review for deeper insights into leasing trends, sale activity, and submarket performance.
- Vacancy Rate Improves: Direct vacancy declined to 11.8%, down from 12.0% in Q3 2024.
- Leasing Activity Totals 1.6M SF: Irvine Spectrum, Mission Viejo, and Costa Mesa led leasing momentum.
- Net Absorption Turns Positive: Net absorption reached 640,722 SF, reversing prior negative trends.
- Average Asking Rent Declines Slightly: Full-service asking rent averaged $2.77/SF, down 1.07% year-over-year.
- Limited New Construction: Only 399K SF of office space remains under development across the county.
- Class A Space Commands Premium: Asking rents for high-end space average $3.20/SF, supported by incentives and amenities.
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