“Such transactions as the Olen deal demonstrate the appeal of large, class-A office spaces—which are becoming increasingly scarce and in demand,” says White. “Even in these early stages of the recovery, we already are seeing a shift—with tenants no longer as rate-driven as in recent months. Many tenants now are making office leasing decisions based on such factors as the space’s role in attracting employees and enhancing their corporate image.”

Brian Childs, an executive vice president and branch manager for NAI Capital Inc. in Newport Beach, CA agrees with White, pointing out that he is seeing a lot of the bigger tenants in the market doing longer leases and taking more space “because they are trying to leverage the market and lock in lower rates in longer terms. “We are seeing confidence from the companies that are comfortable with their financial statements who are confident with the amount of space that they need,” he says.

According to a recent report from Cushman & Wakefield, values among Orange County office properties have hit bottom and a recovery is under way fueled by increased tenant demand, rising investor interest, and a scare competition from new development. “Companies have begun to expand their operations in expectation of continued recovery with the perception that rental rates are at their lowest,” says the report. “Orange County remained a renters market; landlords saw their investments buoyed by high occupancy and positioned themselves to attract tenants by lowering rents and offering lucrative incentives such as free rent, tenant improvement allowances, and renewal options.”