Orange County Office Vacancy Rate Highest in Nine Months

A high-rise construction boom and a seasonal slowdown in leasing activity raised Orange County’s office vacancy levels to 25% in the third quarter, according to a report by Grubb & Ellis Commercial Real Estate Services.

Net absorption--which measures the net change in the rate of square footage occupied from one period to the next--dropped to 528,873 square feet in the third quarter, a sharp 50% below the record absorption levels of the second quarter. The 25% vacancy factor was the county’s highest in nine months.

“It’s a tenant’s market right now in Orange County,” said George S. Spragins, senior vice president and district manager in Grubb & Ellis’ Newport Beach office.

Vacancy rates in the county’s research-and-development buildings dropped to 15% in the third quarter from 17% in the second quarter, thanks to strong demand for high-technology R&D; space, the report said. Demand for traditional manufacturing and distribution space in the county rose one percentage point, to 13%.