Q1 2023 Office Market Outlook – Orange County
Orange County’s office market in Q1 struggled with low demand, resulting in a higher vacancy rate of 13.3%. Sublease space availability increased by 4.6% from the previous quarter and 34.3% year over year, surpassing levels during the Great Recession. The average asking rent remained stable at $2.67 per square foot. Office space under construction dropped by 77.6% year over year to 285,361 square feet.
Trends to Watch
In Q1, Orange County’s newly constructed office buildings had a high vacancy rate of 31.1%. The average asking rent for new construction declined by 24.5% compared to Q1 2020. Both low-mid-rise and high-rise buildings contributed to the increased vacant space. Rent decreased in both types of buildings, with higher drops in low-mid-rise buildings. Work-from-home trends have impacted the demand for office space, leading to challenges for landlords and tenants and affecting real estate values.