Commercial Real Estate News
What the Lee & Associates Brokers See – 2025 Industrial Market Pulse
Overview
The 2025 Industrial Market Pulse report encapsulates the perspectives of 118 industrial real estate brokers from 47 Lee & Associates offices across the U.S. and Canada. The survey, conducted in May 2025, explores brokers’ outlooks on industrial market trends, tenant behavior, leasing activity, and shifting space requirements. Overall, it portrays a cautiously optimistic yet tenant-driven market environment.
General Market Sentiment
The brokers’ sentiment can be described as “cautiously optimistic.” While economic and political uncertainty ,particularly tariff-related issues, has prompted some tenants to pause major decisions, most brokers still expect stable market performance over the next 6–12 months. A key theme throughout the findings is cost sensitivity, with tenants pushing back against rising lease expenses and expecting more concessions from landlords.
The tenant sentiment, as captured in the report, is cautious and steady. Tenants are generally risk-averse, opting to delay decisions amid uncertainties. This translates into heightened pressure on landlords to remain flexible and competitive.
Leasing and Tenant Trends
One of the most critical takeaways is that the industrial leasing landscape has shifted decisively toward tenants. The size of the space significantly affects market leverage. Tenants with requirements in certain size ranges are encountering more options, enabling them to negotiate for lower rents, improved concessions, and shorter lease terms .
The survey highlights five key shifts in tenant behavior:
- 58.5% of brokers observed a greater sensitivity to rental rates and operating expenses.
- 48.3% reported that tenants now expect more generous tenant improvement (TI) packages and concessions.
- 46.7% noted downsizing and demand for smaller footprints.
- 44.1 % indicated a preference for shorter lease durations
- 24.6% observed increased interest in second-generation or Class B/C spaces at discounted rates.
Lease Rate Outlook
Expectations for lease rate movements are mixed but conservative:
- 34.5% of respondents foresee an increase.
- 31.9% believe rates will stay flat
- 26.7% predict a decline.
- 6.9% consider the market too unpredictable to forecast accurately.
This distribution reinforces the broader narrative of minimal growth or stagnation in lease rates, reflecting the broader caution pervading the market.
Regional Insights
The report also breaks down sentiment by region:
- West: Demand persists, but cost concerns are rising.
- Southwest: Tenants are downsizing, and flexibility is more valued.
- Midwest: Shows a steady outlook with modest confidence among landlords.
- Southeast: Cautious growth with a preference for shorter leases.
- Northeast: Incentives are increasing to keep up with active demand.
These regional nuances highlight localized dynamics but maintain the overarching themes of tenant leverage and landlord concession.
Conclusion
The 2025 Industrial Market Pulse underscores a market navigating cautious optimism tempered by economic uncertainties and tenant-driven dynamics. While brokers remain hopeful about the coming months, they are keenly aware of shifts in power dynamics favoring tenants; prompting landlords to adapt through pricing flexibility, shorter lease structures, and added incentives. This report is not only a snapshot of present conditions but also a guide to navigating the evolving industrial real estate landscape.
Commercial Real Estate News
Is the Office Dead? Not in Orange County: Why Hybrid Spaces Are Thriving
The narrative around office spaces has shifted dramatically since the pandemic, but in Orange County, the office isn’t dying; it’s evolving. Thanks to hybrid models that balance in-person collaboration with remote flexibility, the region’s commercial real estate is witnessing renewed momentum.
1. A Rebound in Office Demand
Orange County reclaimed nearly 510,000 sq ft of office space in 2024, surpassing pre-pandemic absorption levels—even with a slight dip year-over-year—indicating strong tenant interest in physical office presence. Yet, direct market vacancy stands at around 12%, suggesting ample opportunity for repositioned and high-quality spaces bizjournals.com .
2. Competitive Pricing and Value-Added Incentives
- Avg. asking rent: ~$2.82 FSG per sq ft/month in late 2024.
- Across Orange city proper:
- Class A/A+ spaces around $32.54/sq ft/yr (~$2.71/mo),
- Class B around $24.05/sq ft/yr (~$2.00/mo).
Landlords are sweetening deals with tenant improvements and fit-out funds to attract hybrid-minded tenants, making mid-to-high quality offices highly appealing bizjournals.com.
3. Hybrid Work Driving Demand for Flexible and Collaborative Spaces
Nationwide, 43% of U.S. firms have structured hybrid models, commonly requiring 2–3 in-office days per week, reflecting a middle-ground approach wsj.comtime.com. Local startups and emerging tech firms in OC often choose hybrid-enabled spaces: open workstations, private huddle rooms, wellness zones, and outdoor breakout areas—catering to employees who split time between home and office.
4. Key OC Submarkets Worth Watching
| Submarket | Avg. Asking Rent (FSG/mo) | Vacancy Rate |
|---|---|---|
| Central Orange Market & Airport Area | ~$2.82 | ~12% bizjournals.com |
| St. Joseph Center | ~$2.73 | 16.3% commercialcafe.com |
| Platinum Triangle | ~$2.65 | 19.9% commercialcafe.com |
| Anaheim Resort | ~$2.40 | 25.1% commercialcafe.com |
| City of Orange | ~$1.71 | 6.1% comercialcafe.com |
- City of Orange: Offers budget-friendly Class B/C spaces (~$20.56/sf/year ≈ $1.71/mo) with historically low vacancy—a smart pick for smaller hybrid teams.
- St. Joseph & Platinum Triangle: Slightly higher rents (~$32.81 and $31.80/sf/year) but boast premier locations and modern amenities, appealing to more expressive hybrid setups.
5. Why Hybrid-Ready Offices Win in OC
- Tenant Incentives: Landlords across OC are offering tenant improvement allowances, free rent periods, and flexible lease terms to draw in hybrid teams bizjournals.com.
- Quality Over Quantity: With new construction paused and functional conversions accelerating nationwide, premium spaces stand out—and demand is shifting toward quality adaptive reuse and upgrades nypost.combizjournals.com.
- Tech & Med Sector Surge: Regional demand is boosted by tech and medical tenants in airport-adjacent zones and South OC, filling 80% of sub-10K sq ft deals in recent quarters cbre.comcbre.com.
- Culture Meets Flexibility: Hybrid spaces foster team collaboration and culture in designated “anchor” days, while allowing remote efficiency—perfectly aligning with both business and employee expectations.
What This Means for Your Hybrid Office Strategy
- If you need a cost-effective base (5–20 people), explore Class B/C buildings in Orange city — strong value and low vacancy.
- If you want to shine and recruit talent, look to St. Joseph Center or Platinum Triangle for amenitized Class A spaces.
- Negotiate lease incentives —ask for TI credits, rent-free build-out months, and flexible lease terms to complement your hybrid model.
- Prioritize fit-out for hybrid work: Provide huddle rooms, focus pods, wellness zones, and high-speed conectivity.
Bottom Line
The office is far from dead in Orange County—it’s adapting. Hybrid work demands smarter, more flexible, and more welcoming office environments. With competitive pricing, landlord incentives, and strong tenant demand, OC’s office market offers rich opportunities. Reach out to Mark Larson to find the ideal hybrid space aligned with your team’s evolving rhythm—and take advantage before demand—and pricing; shift again.
Commercial Real Estate News
Investing in Commercial Real Estate in Fullerton, CA: Why Now Is a Smart Move
Investing in Commercial Real Estate in Fullerton, CA: Why Now Is a Smart Move
If you’ve been considering expanding your investment portfolio, commercial real estate in Fullerton, California presents a compelling opportunity. From retail spaces to mixed-use developments, this dynamic Orange County city offers strong fundamentals for long-term growth and immediate returns.
Why Fullerton?
Located in northern Orange County, Fullerton is more than just a college town. With a population of over 140,000 and home to institutions like California State University, Fullerton (CSUF), the city enjoys a constant flow of traffic, business, and cultural activity.
1. Strong Economic Growth
Fullerton boasts a diversified economy with a healthy mix of education, healthcare, manufacturing, and retail. This economic diversity provides stability for commercial tenants — a key factor for real estate investors.
- Job growth is steady
- Low commercial vacancy rates
- Ongoing city development projects
2. Demand for Retail and Office Space
The revitalization of Downtown Fullerton has sparked demand for retail and mixed-use space. Trendy restaurants, coffee shops, and boutiques attract locals and students alike.
At the same time, flexible office spaces are increasingly attractive to startups and small businesses seeking proximity to Los Angeles without LA prices.
3. Development-Friendly Zoning
The City of Fullerton offers investor-friendly zoning policies, particularly in transit-oriented and mixed-use areas. These allow for adaptive reuse, vertical development, and increased density — ideal for modern investors looking for value-add opportunities.
4. Long-Term Value & Appreciation
Orange County continues to be one of the most competitive markets in Southern California. Fullerton’s affordable entry point relative to nearby cities makes it a strategic location for long-term appreciation.
What Investors Are Saying
“I’ve helped several clients acquire multi-tenant buildings in Fullerton over the past 2 years,” says Mark Larson, local real estate advisor. “With strong tenant retention and city support for commercial development, the ROI potential here is impressive.”
5. Opportunities in Underutilized Properties
Many older properties in Fullerton are ripe for renovation, repurposing, or redevelopment. Investors willing to modernize buildings or convert space can unlock significant equity and rental income potential.
Available Hotspots for Investment
- Retail / Restaurant in Downtown Fullerton – Foot traffic, nightlife, mixed-use buildings – Link -> Freestanding ±3,369 SF retail/restaurant building for sale in Downtown Fullerton – marklarsoncre.com
- Three buildings with strong tenants, parking, and excellent visibility.– Commercial and office zoning – Link -> Industrial/flex property for sale in Fullerton, CA. ±38,646 SF across three buildings with strong tenants, parking, and excellent visibility. – marklarsoncre.com
- Apartment Homes in Fullerton California – SOLD -> Link -> Las Palmas Apartment Homes in Fullerton California – marklarsoncre.com
Final Thoughts
Whether you’re a seasoned investor or exploring your first commercial property, Fullerton offers the perfect mix of stability, growth potential, and community support. If you’re ready to take the next step, reach out today — I’d be happy to show you available listings and opportunities tailored to your goals.
Commercial Real Estate News
The State of Commercial Real Estate in Orange County: Market Trends & Insights
The State of Commercial Real Estate in Orange County: Market Trends & Insights
Orange County’s commercial real estate market continues to be a dynamic and evolving landscape, shaped by economic trends, shifting business demands, and investor confidence. As a premier location for businesses and commercial investors, Orange County offers unique opportunities across various sectors, including office space, industrial properties, and retail developments.
Current Market Trends
1. Office Space Recovery and Adaptation
The office sector in Orange County has faced significant changes in recent years due to hybrid work models and evolving corporate needs. While demand for traditional office spaces has softened, there is a noticeable shift toward flexible, high-quality work environments that emphasize collaboration and amenities. Areas like Irvine and Newport Beach continue to attract companies looking for premium office spaces with modern layouts and convenient access to transit hubs.
2. Industrial Boom Continues
Industrial real estate remains a hot commodity in Orange County, with high demand from e-commerce, logistics, and manufacturing sectors. The rise of online shopping has fueled the need for distribution centers and warehouse space, driving vacancy rates to record lows. Cities such as Anaheim, Santa Ana, and Costa Mesa have seen a surge in industrial developments, with rental rates climbing steadily due to limited supply.
3. Retail Resilience and Transformation
Despite economic uncertainties, retail real estate in Orange County has shown resilience, particularly in high-traffic and affluent areas. The shift toward experiential retail—such as dining, entertainment, and boutique shopping—has helped brick-and-mortar businesses stay competitive. Popular destinations like South Coast Plaza and Fashion Island continue to draw both local consumers and tourists, ensuring strong leasing activity in premium retail spaces.
Investment Insights
1. High Demand for Mixed-Use Developments
Investors are increasingly looking at mixed-use developments that blend residential, commercial, and entertainment spaces. These projects cater to the growing demand for walkable, live-work-play environments, making them attractive options for developers and investors alike.
2. Rising Interest Rates and Their Impact
With fluctuating interest rates, commercial real estate financing has become more complex. Investors are navigating these changes by seeking creative financing solutions, focusing on value-add properties, and adapting to shifting market conditions.
3. Emerging Submarkets to Watch
While established areas like Irvine and Newport Beach remain prime investment locations, emerging submarkets such as Tustin, Costa Mesa, and Huntington Beach are drawing increased attention. These areas offer lower entry costs while still benefiting from Orange County’s strong economic foundation.
Looking Ahead
As Orange County’s commercial real estate market evolves, staying ahead of trends and understanding key investment strategies will be crucial for success. Whether you are an investor, business owner, or developer, the right market insights can help you navigate opportunities and make informed decisions.
For expert guidance in Orange County’s commercial real estate landscape, reach out to Mark Larson, a seasoned broker with deep market expertise and a commitment to helping clients achieve their real estate goals.
Commercial Real Estate News
Golden Opportunities: Smart Strategies for Investing in California’s Commercial Real Estate Market
California’s commercial real estate market offers a wealth of opportunities for investors looking to build long-term wealth. With a booming economy, diverse industries, and a high demand for commercial properties, investing in this market can be a lucrative endeavor. However, success requires strategic planning and a deep understanding of the market. Below are some key strategies to help you make informed decisions when investing in California’s commercial real estate.
1. Understand the Market Trends
Before making any investment, it is crucial to research and analyze market trends. California is home to major economic hubs like Los Angeles, San Francisco, San Diego, and Silicon Valley, each with its own unique real estate dynamics. Pay attention to factors such as rental rates, vacancy rates, and economic growth to determine the best locations for investment.
2. Choose the Right Type of Commercial Property
California’s commercial real estate market includes various property types, such as office spaces, retail properties, industrial warehouses, and multifamily apartment buildings. Your choice should align with market demand and your investment goals. For example:
- Industrial properties have seen significant growth due to the rise of e-commerce and logistics.
- Retail spaces in prime locations can provide stable returns despite evolving consumer shopping habits.
- Multifamily properties are always in demand due to the state’s high population and housing shortages.
3. Location Matters
When investing in commercial real estate, location is a key determinant of success. Coastal cities like Los Angeles and San Francisco offer premium property values but come with high competition and costs. Inland cities such as Sacramento and Riverside provide more affordable investment opportunities with high growth potential. Understanding local economic drivers, infrastructure projects, and demographic trends will help you select a profitable location.
4. Leverage Financing Options
Investing in commercial real estate requires substantial capital, but there are multiple financing options available, including:
- Traditional bank loans with competitive interest rates.
- Commercial real estate loans tailored to investors.
- Private equity partnerships for shared investment opportunities.
- Real Estate Investment Trusts (REITs) for those looking to invest passively.
Consulting with financial experts and lenders will help you determine the best financing strategy based on your risk tolerance and investment horizon.
5. Evaluate Risk and Return Potential
Every investment comes with a level of risk. Conduct a thorough risk assessment, considering factors such as economic downturns, tenant stability, and maintenance costs. Performing due diligence, including property inspections, lease evaluations, and financial forecasting, will ensure a more secure investment.
6. Stay Compliant with Regulations
California has stringent zoning laws, environmental regulations, and rent control policies that can impact commercial property investments. Ensure that you comply with state and local regulations to avoid legal complications. Consulting with real estate attorneys and regulatory experts can help you navigate these complexities.
7. Work with Industry Professionals
Partnering with experienced real estate agents, property managers, and financial advisors can provide valuable insights and help streamline the investment process. Their expertise in market analysis, tenant acquisition, and property management can significantly enhance your success in commercial real estate investing.
Final Thoughts
Investing in California’s commercial real estate market presents both opportunities and challenges. By conducting thorough research, choosing the right property type and location, leveraging smart financing, and staying informed about regulations, you can maximize your investment returns. Whether you’re a seasoned investor or a newcomer, a well-planned strategy will help you capitalize on California’s dynamic and profitable real estate market.
Start exploring your investment opportunities today and let me, Mark Larson, assist you in finding the perfect commercial real estate investment that aligns with your financial goals!