Commercial Real Estate News
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.