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Market Report

Orange County Office Market Report

2Q 2024

Conversions Exceed Ground-Up Pipeline, Pointing
To Possible Near-Term Reduction in Office Inventory

Leasing at existing spaces ticks up amid construction pullback. Office sector volatility is impacting local development activity, with just 80,000 square feet delivered over the 12-month span ending in March. This minimal volume of new space steered tenants to existing properties and aided renewal velocity, dynamics that supported positive net absorption in each of the past four quarters. Limited supply additions will continue over the near term, with office stock potentially shrinking as conversion projects commence. As of May, the active pipeline comprised several smaller buildings totaling 15,000 square feet. Meanwhile, a 200,000-square-foot building in Santa Ana was being redeveloped into an industrial facility, with California State University, Fullerton’s former Irvine campus slated for a similar fate. Other projects may emerge as a group of office assets that sold over the past year are marked for redevelopment.

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