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IRVINE, CA—If job growth stops in Orange County, then demand decreases, which can slow office rent growth. Also, M&A activity that results in layoffs reduces office-space demand, JLL senior research analyst Jared Dienstag tells GlobeSt.com. According to a recent report from the firm comparing office rent growth in various Orange County submarkets since 2010, in addition to leading Orange County's rent growth, strong job growth from startups and mature companies is a key factor in driving the demand for office space in the market.
The report also showed that the Airport Area surpassed 2007's peak average asking monthly rental rate ($3.02 per square foot, full service gross) in Q4 2016 with a rent of $3.06 per square foot. Although West County recorded the lowest rent growth since 2010, the submarket is not as susceptible to cyclical fluctuations as most other submarkets. The current average rent for the total Orange County market of $2.68 per square foot is only 2.2% off the 2007 peak rent of $2.74 per square foot.
We spoke with Dienstag about the reasons behind rent-growth numbers in various submarkets and what factors could turn the tables on this growth.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
