Lease Firm Bullish on Orange County Space

Despite an inventory of vacant office space totaling 5.3 million square feet--out of a base of 23 million square feet--the leasing firm of Grubb & Ellis is optimistic about the future of office leasing in Orange County.

“Tenant requirements in 1985 reflected both a record amount of new space absorbed--1.6 million square feet--and the maturation of Orange County’s office market as a true urban center,” according to George P. Economos, senior marketing consultant for the firm. He predicts that absorption is expected to increase to 2 million square feet this year.

Commenting on the vacancy factor in the mid-20% range, he added that well-located, well-designed buildings will “still absorb according to reasonable schedules.”

The area around John Wayne Airport dominated last year’s office market and will continue to do so this year, Economos added. The airport area had absorption of about 1 million square feet and 1.9 million square feet of leasing activity. Second in importance, with about 1 million square feet leased last year, is the central county area, dominated by downtown Santa Ana and the Anaheim Stadium areas.

In the industrial sector, Orange County ended last year with a vacancy rate of 11%, or about 14 million square feet of a base of 128 million square feet, according to the firm’s David E. Sigmond.

Finally, Grubb & Ellis was bullish about the retail development sector, which ended the year with an overall vacancy rate of less than 5% and as low as 1% or 2% in major retail sectors in Orange County, according to Timothy D. McMahon.