In terms of capital, Brunswick said that “We are all scratching our head wondering what the capital markets are up to. It’s all about yield.” He added that capital is trying to find its way through the real estate market. “Much of it has been raised for the opportunities, but that opportunity certainly hasn’t come out. I think a lot of core buyers are willing to hold these gold-like assets in these gold-like locations and live with yield.”

Brunswick explained that for owners with good assets, now is a good time to sell. Much of the money that was allocated to investment funds is coming to the end of its time, and prices will get more rational here going forward, Brunswick said. “Capital likes Orange County. It is the 16^th market in the country, but is viewed as a good place to put capital.”

Focusing on trends in the Orange County office market, Vargas pointed out that in 2007, the office vacancy rate was 7%. Fast forward to the same time last year in 2010, it was nearly 22%; now, he said, it is around 19%. “We are moving along in Orange County, like the economy, just slowly.”

Vargas explained that Orange County has a “great tenant base” and says that there has been some increased leasing activity and vacancy is heading down. Unemployment, he said, is at a rate of about 9.2% right now, “way better than the national average.”

According to Vargas, “Going forward, at least in this recovery, we can’t rely on one specific industry to take over and take us out of this,” he said. “Vacancy will decline through organic growth.”

On the industrial side, Osbrink said that conditions are very strong both in Orange County and the Inland Empire. In terms of spec construction, Osbrink said if he were to develop today, it would be in the range of 30,000 square feet to 75,000 square feet, which Strasmann agreed is where the void is. “We have always has a very diverse population base and a diverse business base in Orange County. Next year, I expect us to say that prospects are even better, but don’t expect it to change too much,” Strasmann said.

When asked about financing spec development, Johnson said that a spec development deal has to be a good borrower that the bank will lend to. There has to be a good balance sheet and track record etc., but it is being done. On the spec unleased but completed buildings, “there are plenty of players and there have been some big home runs on that front.”

The fundamental equation is job growth, then absorption, then rent growth, Vargas said. “That is what has to happen. Until there is significant job growth, vacancy won’t get to where we want it to be and rent growth won’t get there.” Vargas did point out, however, that rent growth can occur during this time in pockets, based upon supply and demand. “The class A buildings in the airport area will fare better than the class A buildings as they extend out beyond the airport area,” he said.

When Strasmann asked panelists what they will be saying about the OC market next year, Vargas said he expects to see a huge transfer of wealth, great creation of wealth and wealth growth. “My prospects for Orange County are only up,” he said. Osbrink too said that “prospects are better,” but he doesn’t expect things to change too much. Brunswick too, being the optimist, said that conditions in Orange County will definitely be better a year from now than it is today.

When Strasmann asked what keeps panelists up at night, Vargas’ answer was talent. “The brokerage business is all about talent and we want to make sure we are getting the best and brightest. For Johnson, what keeps him up is things beyond his control in the world…the unknown. For Brunswick, it is the country getting passive. “We have got to get back to creating jobs and get things moving again. We’ve got to get active and dial it up,” he said.

Check back Monday for more coverage from RealShare Orange County.