As we enter the final stretch of 2024, the office leasing market in Orange County is seeing increased activity, with 1.9 million square feet (msf) of office space leased in Q3 2024. This represents a 29.9% jump from the previous quarter, but is this spike a sign that now is the time for your business to secure its next lease?
Renewal Deals are Driving Growth
A key insight from Q3 2024 is that renewal deals are driving the leasing market. Many businesses are opting to stay in their current offices, with eight of the top 10 lease transactions coming from renewals. This trend points to a cautious market where expansion is on hold and companies are focusing on stability over growth.
Why Office Demand is Still Limited
Despite the increase in leasing activity, the demand for new office spaces remains relatively low. Many businesses are choosing to downsize their office footprints in response to the ongoing trend of remote and hybrid work. Companies are hesitant to take on new leases as they reassess their long-term space needs, leading to a “wait-and-see” approach that is keeping the market somewhat subdued.
What Tenants Need to Consider:
• Downsizing trends mean that availability for larger office spaces may increase in the future, but the current market is tight for new space.
• Leasing renewals are often negotiable, and with occupiers focused on maintaining their existing space, there’s room to secure favorable terms.
• Rental rates are creeping up slightly, but this offers an opportunity for businesses to lock in lower rates before further increases occur.
Is It the Right Time to Lease?
The key takeaway for tenants is that timing is everything. While the market is shifting and many occupiers are holding off on expansions, this could be an opportunity to secure a new lease at a competitive rate. If your business is growing or in need of a change, acting sooner rather than later might allow you to capitalize on current conditions before rental rates increase further.
The Ocean Company is Here to Help
If you’re considering a lease renewal or looking for new office space in Orange County or Los Angeles, The Ocean Company can guide you through the process. We specialize in tenant representation and can help you navigate this evolving market.
Contact us today to discuss your leasing options and find the best space for your business.