The Orange County office market remained healthy in 3Q 2019 as office demand continued to increase in lock-step with the steady inflow of new supply. Direct net absorption this quarter continued to regain strength from the negative absorption levels in the beginning of the year, asking rental rates remain at post-recession highs, and vacancies are relatively stable.
In addition, sales transactional volume remains robust, nearly doubling the amount from the beginning of the year as investors continue to trade trophy properties and office campuses. Currently the unemployment rate sits at 3.0%, 120 basis points (bps) lower than the state’s average of 4.2% and 80 basis points (bps) lower than the national average, respectively. According to the State of California’s Employment Development Department, total nonfarm employment increased by 12,500 jobs year over year, or 0.8% growth between August 2018 and August 2019. The strongest benefactors were leisure and hospitality and educational and health services industries, adding 7,600 jobs and 3,900 jobs, respectively. As market fundamentals continue to improve, we can expect the Orange County office market to remain healthy moving forward.
Orange County Office Market Report
3rd Quarter 2019