How Tech, Medical and Creative Office are Bringing OC's Mojo Back
Orange County has gone from recovery mode to growth mode — and the real estate market's got more leasing, sales and rental growth ahead of it as tech clusters blossom and landlords revamp space to attract young workers.
That was the consensus of speakers at our 4th Annual Orange County State of the Market at the Hotel Irvine. A number of metrics point to the health of the OC office market, our speakers explained to the 250 attendees. For instance, OC accounts for roughly 20% of the overall office base in SoCal, yet represented about a third of the total absorption over the past four years. While other SoCal communities are getting closer to peak numbers, OC is still 24% shy of its peak, so rental rates have a lot of room to grow. Fundamentals are strong in OC, with a diverse labor pool, solid office job growth and very little new product. All of that bodes very well for a continued increase in rents in 2015.
Another growth sector in OC the speakers discussed is tech clusters, such as a medical device innovation district in Aliso Viejo. Looking ahead, there will be more places like it, as linkage and collaboration between UCI and the private sector grows. Demand for space from medical device makers, as well as bioscience and communication companies such as Qualcomm, will also surge. Snapped: Newmark Grubb Knight Frank’s Andrew Robben, who moderated, Greenlaw Partners’ Wil Smith, Cushman & Wakefield’s Jeff Cole, Voit Real Estate Services’ Eric Hinkelman, Bixby Land’s Aaron Hill and Parker Properties’ Russ Parker.
The demand for creative office space is fully mature, just as in other parts of the state, and is helping drive the strongest overall demand for office in the last seven years, the speakers said. Landlords and tenants alike are well past the perception that creative office space means only concrete floors and open space. Instead, the goal of creative office now (besides open space) is an amenity rich, flexible office campus in a desirable mixed-use setting. Allen Matkin’s John Condas, who moderated, Prologis’ Kim Snyder, CapRock’s Patrick Daniels, KPRS’s Joel Stensby and Sares-Regis Group’s John Hagestad.
