Orange County Building and Palm Trees

Orange County Sees Positive Net Absorption

Posted on July 13, 2012 · Posted in News

The Orange County market report for the second quarter is out, and it shows that both availability and vacancy have decreased since the previous quarter. This is a positive indication that the office market continues to improve. Orange County posted a positive net absorption of 955,283 sqft, the largest amount of absorption seen in a single quarter since the middle of 2005. Even with the large amounts of net absorption in the second quarter, many industry professionals expect to continue to see positive absorption in the second half of the year, another strong indication the recovery will continue.

As companies continue to absorb and use more space, the vacancy and availability rates will continue to decline. Absorbing the most space will be companies mainly in research-oriented businesses such as IT, defense, and medical as well as alternative energy. Major companies are also currently growing their footprints in the Orange County market. CoreLogic will move into a new 170,000 sqft space in the Spectrum in August and A to Z Development, which currently occupies 23,000sqft, will expand to 82,000, in the same building. Both of these moves will impact the absorption in the third quarter.

A downward trend in the amount of vacant office space that is being added to the market each quarter, as well as an expectation that investors activity will increase as they dispose of distressed assets will also contribute to the continuing recovery. Thanks to all these factors, the recovery will continue as long as job growth continues and consumer confidence stabilizes.