Orange County Office Market Report

The following reflects Orange County office market conditions as of 2Q 2026.

MARKET DRIVERS

Orange County’s office market continued to improve in the second quarter, reflected in stronger positive net absorption compared with nearby regions. Manufacturers and medical users were among the companies driving the quarter’s expansions, and lease negotiations and overall volume advanced at a measured pace even as some tenants consolidated their office footprints.

Leasable space also contracted as existing properties underwent renovation. Owners are purchasing, improving, converting, or redeveloping these buildings for mixed-use purposes in response to tenants’ continued preference for prime locations, positioning the market for further stabilization as excess supply diminishes.

ECONOMIC REVIEW

Orange County’s economy remained largely stagnant in the second quarter, with employment growth continuing to trail the national average amid a persistent labor shortage. Even so, the local job market has stayed more competitive than surrounding Southern California areas.

NEAR-TERM OUTLOOK

Vacancy rates remain particularly low — often in the single digits — across many suburban submarkets of North County and Coastal South County that lack large office towers. Available space in these areas appears aligned with tenant demand, consistent with the meaningful net absorption recorded this quarter.

Orange County has seen a slowdown in new office development, as developers remain reluctant to start typical office building projects amid rising interest rates and tighter lending conditions.

Frequently Asked Questions

What is the office vacancy rate in Orange County in Q2 2026?

Orange County’s direct office vacancy rate was 10.9% in Q2 2026, unchanged from the prior quarter (1Q26) but down from 12.0% a year earlier, according to Kidder Mathews research. The total vacancy rate, which includes sublet space, was 11.9% countywide. Vacancy varied widely by submarket, from a low of 0.6% in Tustin to a high of 22.3% in The City.

What is the office availability rate in Orange County in Q2 2026?

The overall availability rate in Orange County was 15.1% in Q2 2026, down from 15.9% one year ago, according to Kidder Mathews research. This marked a slight increase from 14.7% in the prior quarter, but the year-over-year decline points to gradually diminishing excess supply.

What are current office asking rents in Orange County?

The countywide average full-service asking rent was $2.94 per square foot per month in Q2 2026, up 4.3% from $2.82 a year earlier, according to Kidder Mathews research. Rents also rose from $2.85 in the prior quarter, continuing a steady upward trend.

What is the range of office asking rents across Orange County submarkets?

Average asking rents ranged from a low of $2.04 per square foot per month in Garden Grove to a high of $3.93 in Newport Beach in Q2 2026 (Data source: CoStar). Airport Area and South County submarkets generally commanded the strongest rents, while several North County submarkets sat below the countywide average.

How much office leasing activity took place in Orange County in Q2 2026?

Orange County recorded 1,544,248 square feet of office leasing activity in Q2 2026, according to Kidder Mathews research. Year-to-date leasing activity totaled 3,390,748 square feet, down from 8,654,675 square feet over the same period in 2025, a 61.44% year-over-year decline.

What was net absorption for Orange County office in Q2 2026?

Orange County posted 54,420 square feet of positive net absorption in Q2 2026, according to Kidder Mathews research. Net absorption measures the change in occupied space, and positive figures indicate tenants are occupying more space than they are vacating. The Airport Area submarket group led with 175,722 square feet of positive absorption, while South County saw a net decline of -295,366 square feet for the quarter.

How much office space is under construction in Orange County?

Approximately 216,000 square feet of office space was under construction in Orange County as of Q2 2026, according to Kidder Mathews research. The largest projects underway include The Weave @ocV!BE in Central County (168,137 SF, delivering November 2028) and Advantech, also in Central County (108,942 SF, delivering June 2026). New deliveries during the quarter totaled 109,000 square feet.

What was the largest office sale transaction in Orange County in Q2 2026?

The largest sale of the quarter was 601 Dover Dr, sold for land value at $26,475,000 ($405.19 per square foot) on a 65,340-square-foot building, according to Kidder Mathews research. Shea Homes purchased the property from IRA Capital, LLC. The PDF cover page identifies the property’s location as Newport Beach, while the transaction table lists its submarket as Airport Area — this discrepancy is noted for verification.

What was the largest office lease transaction in Orange County in Q2 2026?

The largest lease transaction was a 54,745-square-foot renewal by Z Supply at Harbor Gateway Business Center in the Airport Area submarket, signed in May 2026 with landlord C. J. Segerstrom & Sons, according to Kidder Mathews research. Other notable leases included a 43,854-square-foot deal at Jamboree Center and a 42,901-square-foot lease at Spectrum Terrace.

What is the outlook for the Orange County office market?

The near-term outlook points to continued stabilization, with vacancy remaining particularly low in many suburban North County and Coastal South County submarkets, according to Kidder Mathews research. New office development has slowed considerably, as rising interest rates and tighter lending conditions have made developers reluctant to start new projects, which should help support fundamentals as available space aligns with tenant demand.

Last updated: 2Q 2026. Data source: EDD, CoStar. Compiled by the Kidder Mathews Research Group.

2Q 2026 Orange County Office Market: Key Data Points

Explore our full Orange County office market review for deeper insights into leasing trends, sale activity, and submarket performance.

Vacancy Rate Improves Year-Over-Year: Orange County’s direct vacancy rate declined to 10.9% in 2Q 2026, down from 12.0% one year ago, signaling continued market stabilization.
Asking Rents Continue to Rise: Average full-service asking rents reached $2.94 PSF per month, increasing 4.3% year-over-year.
Positive Net Absorption Persists: The market recorded 54,420 SF of positive net absorption during the quarter and 324,936 SF year-to-date, reflecting ongoing tenant demand.
Leasing Activity Exceeds 1.5M SF: Quarterly leasing volume totaled 1.54M SF, demonstrating continued occupier activity across the county.
Limited New Supply Supports Fundamentals: Only 109,000 SF of new office space was delivered during the quarter, while approximately 216,000 SF remains under construction.
Availability Rate Trends Lower: The overall availability rate improved to 15.1%, down from 15.9% a year ago as excess supply continues to diminish.

Submarket Statistics

Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)

Orange County Office Submarket Statistics 2Q26 — Airport Area: includes Costa Mesa, Irvine/Tustin Legacy, Newport Beach, South Santa Ana
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Costa Mesa	9,250,968	11.8%	15.9%	12.6%	79,264	167,197	259,215	$3.39
Irvine/Tustin Legacy	26,540,964	13.3%	18.5%	14.0%	26,620	384,697	1,113,248	$3.14
Newport Beach	12,678,385	10.2%	13.8%	10.9%	40,558	140,541	283,832	$3.93
South Santa Ana	2,449,106	19.9%	24.7%	20.2%	29,280	59,392	95,085	$2.62
Class A	26,061,695	17.5%	21.6%	18.2%	45,296	446,161	1,021,615	$3.42
Class B	22,241,154	7.8%	12.3%	8.4%	137,986	293,379	687,591	$3.04
Class C	2,616,574	4.6%	13.9%	5.3%	-7,560	12,287	42,174	$3.10
Airport Area Total	50,919,423	12.6%	17.2%	13.3%	175,722	751,827	1,751,380	$3.23

Orange County Office Submarket Statistics 2Q26 — Central County: includes Civic Center Area, East Orange, Main Place, Parkcenter, Santa Ana, Stadium Area, The City, Tustin
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Civic Center Area	5,628,411	6.4%	5.5%	6.4%	34,729	4,041	15,327	$2.59
East Orange	2,149,500	3.7%	4.6%	3.7%	-4,289	6,930	16,060	$2.46
Main Place	2,762,549	10.6%	11.9%	11.7%	-8,389	31,853	63,257	$3.36
Parkcenter	4,526,793	11.2%	16.6%	13.6%	-7,395	57,965	141,187	$2.43
Santa Ana	4,466,966	7.7%	11.8%	8.6%	58,981	2,097	16,724	$2.51
Stadium Area	3,717,471	13.6%	19.1%	13.7%	38,361	44,660	65,396	$2.07
The City	2,679,123	22.3%	21.0%	22.3%	-124,903	52,488	67,233	$2.93
Tustin	1,679,360	0.6%	6.4%	0.6%	105,127	0	7,007	$2.42
Class A	7,015,746	16.4%	22.0%	18.0%	62,585	87,190	172,059	$3.07
Class B	15,091,957	7.8%	8.7%	8.2%	32,205	80,901	151,562	$2.37
Class C	5,502,470	6.6%	9.8%	6.7%	-2,568	31,943	68,570	$1.80
Central County Total	27,610,173	9.8%	12.3%	10.4%	92,222	200,034	392,191	$2.57

Orange County Office Submarket Statistics 2Q26 — North County: includes Anaheim Hills, Brea/La Habra, Buena Park/La Palma, Fullerton, North/East Anaheim, Placentia/Yorba Linda
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Anaheim Hills	1,457,067	5.7%	7.0%	5.7%	50,890	2,440	22,834	$2.56
Brea/La Habra	4,398,354	14.6%	18.3%	14.7%	21,877	20,194	91,446	$2.85
Buena Park/La Palma	2,271,808	7.6%	9.1%	8.2%	-1,191	7,560	24,031	$2.55
Fullerton	2,790,275	3.5%	4.7%	3.5%	24,992	9,517	19,533	$2.55
North/East Anaheim	5,441,385	5.2%	9.4%	8.7%	-15,489	4,766	20,498	$2.60
Placentia/Yorba Linda	832,459	11.1%	9.9%	11.1%	-16,622	3,553	11,999	$2.35
Class A	2,916,789	16.5%	19.4%	16.9%	19,779	12,336	59,743	$2.90
Class B	11,624,495	7.1%	10.4%	8.8%	34,659	32,014	113,720	$2.59
Class C	2,718,064	2.6%	2.6%	2.6%	10,019	3,680	16,878	$2.45
North County Total	17,259,348	8.0%	10.7%	9.2%	64,457	48,030	190,341	$2.65

Orange County Office Submarket Statistics 2Q26 — South County: includes Irvine Spectrum, Laguna Hills/Aliso Viejo, Laguna Niguel/Laguna Beach, Lake Forest/Foothill Ranch, Mission Viejo, Dana Point/San Juan/San Clemente
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Irvine Spectrum	15,293,931	11.3%	16.3%	12.2%	-205,799	303,564	647,187	$3.01
Laguna Hills/Aliso Viejo	6,169,422	15.4%	29.8%	21.3%	-104,032	74,935	111,720	$2.68
Laguna Niguel/Laguna Beach	2,105,578	3.2%	4.0%	3.5%	16,511	16,392	26,997	$3.31
Lake Forest/Foothill Ranch	3,418,186	12.9%	22.6%	13.1%	-6,151	41,551	63,426	$2.44
Mission Viejo	2,293,177	14.0%	17.1%	14.3%	5,148	30,744	66,369	$2.47
Dana Point/San Juan/San Clemente	2,453,412	5.4%	6.9%	5.5%	-1,043	23,885	35,710	$2.77
Class A	10,709,022	11.8%	23.4%	15.4%	-244,711	190,433	474,076	$3.36
Class B	19,848,380	11.8%	15.8%	12.5%	-55,177	291,692	440,082	$2.60
Class C	1,974,445	5.5%	10.0%	5.5%	4,522	8,946	37,251	$3.06
South County Total	32,531,847	11.4%	17.9%	13.0%	-295,366	491,071	951,409	$2.89

Orange County Office Submarket Statistics 2Q26 — West County: includes Cypress, Fountain Valley, Garden Grove, Huntington Beach, Los Alamitos/Stanton, Seal Beach, Westminster
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Cypress	1,783,180	22.1%	25.0%	22.4%	-1,556	11,520	13,520	$2.57
Fountain Valley	2,448,286	4.3%	4.5%	4.4%	3,347	10,940	18,954	$2.31
Garden Grove	2,153,401	6.1%	8.0%	6.2%	7,388	2,354	6,296	$2.04
Huntington Beach	3,102,036	11.6%	14.3%	13.0%	-1,341	7,037	32,686	$2.66
Los Alamitos/Stanton	1,229,795	3.4%	4.3%	4.1%	1,544	11,722	19,873	$3.03
Seal Beach	573,645	7.5%	9.3%	9.8%	4,730	9,713	13,698	$3.48
Westminster	938,591	7.5%	9.7%	8.4%	3,273	0	400	$3.02
Class A	2,439,975	16.3%	22.3%	18.8%	25,835	15,054	31,727	$2.73
Class B	7,321,883	8.3%	9.3%	8.5%	-10,298	26,169	50,388	$2.46
Class C	2,467,076	5.7%	5.8%	6.0%	1,848	12,063	23,312	$3.44
West County Total	12,228,934	9.4%	11.2%	10.1%	17,385	53,286	105,427	$2.61

Orange County Office Market Total 2Q 2026 — combined totals for all submarkets
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Orange County Total	140,549,725	10.9%	15.1%	11.9%	54,420	1,544,248	3,390,748	$2.94

Orange County Office 2Q 2026 — Breakdown by type
Submarket	Total Inventory (SF)	Direct Vacancy Rate	Total Availability Rate	Total Vacancy Rate	2Q26 Direct Net Absorption (SF)	2Q26 Total Leasing Activity (SF)	YTD Total Leasing Activity (SF)	Average Rental Rate (FS)
Class A	49,226,587	15.9%	21.9%	17.5%	-91,216	751,174	1,759,220	$3.30
Class B	76,127,869	8.8%	11.9%	9.5%	139,375	724,155	1,443,343	$2.70
Class C	15,210,629	5.3%	8.6%	5.5%	6,261	68,919	188,185	$2.51

Significant Sale Transactions 2Q 2026

Orange County Office Significant Sale Transactions 2Q 2026
Property	Submarket	SF	Sale Price	$/SF	Buyer	Seller
601 Dover Dr (Sold for Land Value)	Airport Area	65,340	$26,475,000	$405.19	Shea Homes	IRA Capital, LLC
95 Argonaut (Sold for Land Value)	South County	124,149	$14,000,000	$112.77	Meritage Homes	Argonaut Offices, LLC
3146-3152 Red Hill (Office Conversion Project)	Airport Area	43,672	$13,894,500	$318.16	Grace Fellowship Church	Modern Development Co.
Easthill Corporate Plaza	North County	40,066	$9,500,000	$237.11	Investment Concepts, Inc.	Abady Holdings Corp.
Mountain View Business Center	South County	28,827	$9,200,000	$319.15	Levana Investments, LLC	Tappan Investments
800-850 Glenneyre St	South County	8,296	$5,800,000	$699.13	CheckerProp	Mount Angel Abbey

Significant Lease Transactions 2Q 2026

Orange County Office Significant Lease Transactions 2Q 2026
Property	Submarket	SF	Transaction Date	Landlord	Tenant
Harbor Gateway Business Center	Airport Area	54,745	May 2026	C. J. Segerstrom & Sons	Z Supply (Renewal)
Jamboree Center	Airport Area	43,854	April 2026	The Irvine Company	RWTinc.
Spectrum Terrace	South County	42,901	May 2026	The Irvine Company	BD
The Cascades	South County	31,316	June 2026	Cypress Office Properties	Undisclosed
Discovery Park	South County	27,153	June 2026	The Irvine Company	Undisclosed
Griffin Towers	Airport Area	27,028	May 2026	Kingsbarn Realty Capital	Videlle Investments

Significant Under Construction

Orange County Office Significant Under Construction 2Q 2026
Property	Address	Submarket	SF	Owner	Delivery
The Weave @ocV!BE	2525 E Katella Ave	Central County	168,137	H&S Ventures	November 2028
Advantech	SEC Red Hill Ave & Victory Rd	Central County	108,942	SOC Community College District	June 2026
BeWell OC Building	7850-7900 Marine Way	South County	74,800	Mind OC	July 2026
Medical Office Building	17931 Von Karman Ave	Airport Area	68,000	PMB Real Estate Services	August 2026
Medical Office Building	121 E Whittier Blvd	North County	10,000	Gire Orthodontics	August 2026

Data as of 2Q 2026. Source: EDD, CoStar. Prepared by the Kidder Mathews Research Group.

Contact

GARY BARAGONA
Vice President, Research
gary.baragona@kidder.com
View Bio