The office leasing market in Orange County experienced a significant shift in the third quarter of 2024, recording 1.9 million square feet (msf) in leasing activity. This reflects a 29.9% increase from the previous quarter and a modest 2.3% increase year-over-year. These numbers indicate a positive shift in market dynamics, driven primarily by lease renewals.
Leasing Trends in Q3 2024: The Airport Area Takes the Lead
A substantial portion of the lease activity during this period came from the Airport Area submarket, a hub for financial services and insurance companies. These sectors were responsible for driving the demand, with many businesses opting to renew their leases rather than expand their office space. Notably, eight out of the top 10 lease transactions were renewals, showing that while leasing activity is up, new office space demand remains limited.
Why the Wait-and-See Approach?
Despite the uptick in leasing, occupiers are still cautious. Many businesses are adopting a wait-and-see approach, hesitating to expand or move into new spaces. This is largely due to the uncertainty surrounding the economy and the continuing trend of hybrid work models. As a result, many companies are choosing to downsize their office space footprints to reflect the reduced in-office headcount. This caution is something tenants need to be aware of as it shapes the market’s future availability and pricing.
Key Takeaways for Tenants:
• Leasing renewals are dominating the market, especially in key submarkets like the Airport Area.
• Financial and insurance sectors are driving demand, a factor to consider if you’re in a related industry.
• Tenants looking for new space may find limited availability as companies continue to downsize.
• With occupiers hesitant to expand, now could be a strategic time to renegotiate lease terms.
How The Ocean Company Can Help
Whether you’re looking to renew your lease or explore new opportunities, The Ocean Company specializes in tenant representation in the Orange County and Los Angeles markets. We have the expertise to help you navigate this shifting landscape and secure the best possible deal for your business.
Call us today to discuss your office space needs and discover how we can help you find the perfect solution.