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Market Report

Orange County Office Market Report

2024 Investment Forecast

Conversions Poised to Have a Tangible Impact on Metro’s
Office Stock and Investment Landscape

Industrial fundamentals have positive implications for office sector. Orange County closed out 2023 with its highest year-end vacancy in over a decade. Still, a trio of factors suggests the metro will register only a slight increase to this rate in 2024, with local vacancy holding below that of neighboring Los Angeles and San Diego. A high percentage of the 20,000- to 50,000-square-foot-plus leases inked last year have 2024 move-in dates, which will aid overall net absorption. Perhaps more significant, the local office inventory has the potential to shrink. A lack of supply additions this year coincides with some recently transacted properties being removed from stock as part of conversion projects. Whether entailing a gutting of the interior or a complete teardown, most of these conversions will be of the office-to-industrial variety in areas that include Santa Ana and Orange proper. With the metro claiming the lowest industrial vacancy rate among major West Coast markets at the onset of this year, additional conversions are possible beyond 2024.

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