In Q3 2024, available sublease space in Orange County fell to 3.0 million square feet, representing a 7.2% decrease from last quarter and a significant 21.7% drop year-over-year. This decline suggests that sublease opportunities are becoming scarcer, especially as many companies let their sublease terms expire.

Understanding the Sublease Market

Subleasing has been a key strategy for businesses looking to reduce costs by leasing out unused office space. However, with the drop in available sublease space, it’s clear that fewer companies are offloading their excess office real estate. This could be due to companies reaching the end of their sublease agreements, or because fewer businesses are willing to sublease their space in the current economic climate.

Office Availability: A Look at the Numbers

Overall office availability in Orange County dropped by 10 basis points to 22.9% in Q3 2024, down from 24% a year ago. This may not seem like a significant shift, but combined with the fall in sublease space, it reflects a tightening market for tenants who may be looking for flexible options.

The Impact on Tenants:

• Fewer sublease options mean less flexibility for tenants looking to secure short-term or more affordable office space.

• Class A properties remain in demand, especially with trophy spaces added to the market, but availability is tight.

• Average asking rental rates are rising slightly, with the market seeing increases of $0.10 per square foot from the previous quarter.

How to Navigate the Market:

For tenants, this shift in the sublease market means fewer options and potentially higher costs. If you’re considering expanding or relocating, it’s important to act quickly before availability tightens further. Even if sublease space is not your preferred option, understanding its role in the overall market can help you make better leasing decisions.

If you’re searching for the best office space solutions in the Orange County or Los Angeles areas, let The Ocean Company guide you. Our expertise in tenant representation will ensure you get the space you need at a price that makes sense for your business.