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Year-end Office Report Calls for More Product, Less Demand in 2001

NEWPORT BEACH, CA-The latest report released by Marcus & Millichap expects construction of new space to continue, possibly flooding the market in the face of lower job growth, decreasing demand and rate of absorption.

By Joel Cone | Updated on January 09, 2001

NEWPORT BEACH, CA-With the national and local economies cooling off, changing dynamics of important economic indicators will have an effect on the Orange County office market in 2001, according to a recently released report.

The latest Office Research Report for the county, published by Marcus & Millichap, highlights a number of factors that lend credence to the report’s 12-month projections for this year. Key among those factors is job growth, which is expected to decline 0.5% to a rate of 2.5% for the year, possibly having a negative impact on the demand for office space. Still, the county reached a record low 2.3% unemployment rate in 2000. That, combined with continued job growth in the high-tech sector, bode well for continued strength in the local economy.

On the heels of 5.2 million sf of completed office space in 2000, the report calls for an additional 4.5 million sf of space to be built. If projections for slower job growth come to fruition, most likely the rate of absorption of that new space will decline.

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