MARKET DRIVERS
In the first quarter of 2024, the Orange County Office market is showing signs of stabilization following the pandemic. It is anticipated that Orange County’s office market will sustain its strong performance in the coming quarters. The net absorption reported has decreased because of a decrease in leasing activity. Despite the market stabilizing, there are still a considerable number of job openings compared to historical patterns. The market maintains its strength and balance because of the limited construction of new office buildings, which serves as a safeguard against rising labor costs and ongoing economic instability.
Though still higher than pre-pandemic levels, vacancy rates were unchanged from the previous quarter. The market statistics are a better performance than their surrounding neighboring areas. This new year will see additional renewals, modifications, or relocations because of the company’s hybrid work arrangements, which result in a reduction of workspaces.
ECONOMIC REVIEW
Orange County’s economy is projected to grow by 2.5% in 2024 but at a slower rate compared to the ongoing positive and strong growth. The primary industries driving its growth are technology, healthcare, and financial services, and it has rebounded more successfully than average with minimal job losses.
Employment has seen a significant cumulative increase because of population growth following the epidemic. There is a growing need for office space on medical campuses and research centers due to the fast development of the healthcare industry and the emergence of technology hubs that are drawing both startups and established technology companies. The two biggest industries to hire people will still be accounting and consulting.
NEAR-TERM OUTLOOK
Office space is in high demand because of limited new construction and increasing rates. The rising need for flexible workspaces, hybrid work models, and remote work all contribute to the demand for flexible office setups. Rents are expected to continue rising, especially for premium office locations.
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