When thinking about the top office markets in the country, Orange County Office is not necessarily the first area that comes to mind. But the reality is that the sector in the county is extremely strong. There is more than one million square feet of development taking place, and vacancy rates are now extremely strong, at 92 percent. Kevin May, a business development director at GRS Group, was at the Connect Orange County conference earlier this summer and gave us his thoughts on how that sector is performing as well as the overall performance of commercial real estate in the region.
What was your big takeaway from the Connect Orange County conference?
The office space is a lot hotter than anyone thought previously. There is plenty of development, and the leasing and rent rates all look great. One of the things that is driving the resurgence of the office market in the county is creative-office development and redevelopment. Many of the panelists spoke about this.
What is driving this trend?
Well, the economy is more diversified than it used to be in Orange County. That certainly helps things. When the recession took place, most of the office tenants were in the financial-services arena. What we are seeing now are more tech firms, as well as biotech and other companies entering the area. It’s really driving the leasing growth.
How significant is the creative-office movement right now?
As more Millennials move into the area, we are seeing plenty of younger talent coming into office spaces around the Orange County area. They demand things that older generations aren’t so focused on. It’s not a world of cubicles and corner offices anymore. We now have workspaces that are more collaborative. This is not just in urban areas anymore.
What about the industrial sector? We know the ports of Los Angeles and Long Beach were discussed a lot…
The industrial sector of Orange County is especially vibrant. There is a lot of manufacturing activity in the area right now, and that is driving growth. Rents are very high in that commercial real estate sector. That being said, there is a lot of activity in the Inland Empire area as well. They are two different climates. The Inland Empire has more distribution tenants, such as Amazon and Walmart, while Orange County is more focused on building products.
So what does GRS Group do to serve clients in this region of the country?
We’re an international firm headquartered in Irvine providing a variety of services to help minimize risk in commercial real estate transactions. We provide Financial Advisory, Title Insurance, Appraisals, Surveys, Environmental, Engineering and Zoning Compliance. Being based in Irvine we have a very strong local presence and are working on some of the largest transactions in Orange County.