ORANGE COUNTY, CA—Healthcare and technology are two of the key drivers creating job growth in Orange County that surpasses that of the nation as a whole, JLL VP Jason Lantgen tells GlobeSt.com. According to a recent technology report from the firm, Orange County has one of the fastest-growing tech markets in the nation; based on a rolling 12 months, Orange County technology firms attracted a total of $586.97 million of venture-capital funding, up 63.5% from the previous 12 months. Also, in the JLL locator matrix—based on start-up momentum, tech real estate, employment costs and other key factors—Orange County ranked in the "high start-up opportunity, low cost" category, which is the sweet spot for young companies. In addition, tech firms in Orange County have a large labor pool with a highly educated and talented workforce.

We spoke exclusively with Lantgen about Orange County's economy and job growth and what the future looks like for the region.

GlobeSt.com: What evidence is there that Orange County's economy is growing faster than the nation's as a whole?

Lantgen: Well, a key piece of the economic growth, and the initial starting point before looking at any real estate component, is always jobs. Orange County's 12 month job growth was 2.7%; the nation as a whole grew at a clip of 2.0%. Current OC unemployment of 4.3% represents a year-over-year 90-basis-point drop (510 bps from October 2009) vs. the national unemployment of 5.0% dropping 70 bps over the last 12 months and 500 bps from October 2009. Vacancy, rental rates, etc., are all stronger than the national averages we've seen across the board. 

GlobeSt.com: What are the drivers for this growth, and what is the outlook for these drivers moving forward?

Lantgen: The industries that we are seeing with the most growth are Orange County's expanding healthcare presence and an ever growing technology base. The healthcare sector has added 7,600 jobs (+4.6%) over the last 12 months. On the technology side, as of Q2 2015, the Orange County technology industry raised $500.97 million in venture-capital funding (39.5% year-over-year growth) in a 12 month period. This accounts for the 10th highest in the nation. Not only are established firms raising funds, but also these new firms will be looking to hire here in Orange County, expanding their presence. This wouldn't be possible if the people and the environment weren't right. 

The key drivers and outlook going forward for tech and healthcare continue to be strong. Businesses need innovation, skilled labor and access to capital going forward. As long as OC and Southern California maintain their entrepreneurial spirit and the VC markets continue to invest in these companies, OC will continue to be more and more diverse with the representation of industries here. With the concentration of top-tier higher-education universities in Southern California, the access to labor will always be here. 

The traditional tech markets are very strong and always will be. But they are also too expensive and too competitive for mature firms to continue to grow. This has enabled younger, less-established markets to secure employers and that growth, ultimately creating a younger ecosystem due to the value. Orange County, for what it's worth, was placed in the upper quadrant of the report for its low cost and high start-up opportunity. We're seeing all-in costs for an employee in Silicon Valley as $219,200. That same employee costs $99,524 here in Orange County. That's value.

GlobeSt.com: What new areas is Orange County's economy expanding into, and how will this affect commercial real estate in this market?

Lantgen: I wouldn't be surprised if we saw in the next 12 months one or two industries in Orange County come back, in a modified but improved way. While these new industries will have an impact on the current market clusters, the impact and shift of the OC economy has already been felt in commercial real estate. Healthcare, real estate, financial services and even certain law firms are seeking out creative projects in order to attract and retrain top talent. As a result, landlords have responded by not only renovating office space to appeal to those tenants, but by adding new amenities. 

The Orange County market, like the rest of the country, is in a major generational shift with Baby Boomers and how they work, being transitioned out by Millennials in the office. To put this in perspective, by 2020, the median age of the workforce will be 30 years old. Factor that in with technology, both household members working, being able to work from home, etc., and office dynamics are just different. Most of the properties in Orange County were built in the 1980s—it's safe to say nobody had today's workforce in mind at that time.

GlobeSt.com: What other trends are you noticing in the Orange County tech office market?

Lantgen: It could be said that with "co-working" environments being so popular, short-term leases, flexibility and low up-front costs are a new trend. That has always been in demand though, right? 

On that note, but in a different way, the big trend we are seeing isn't the "creative space" with amenities nearby, but a creative campus or creative setting. Going into an old traditional office building, building out a few vacant spaces as "creative" and raising the price on it isn't really cutting it anymore. You don't put a Nordstrom next to a Walmart, right?

Tech companies want projects that "feel" like the place they need to be, near companies like them. The creative conversions have been seeing more demand from our clients, as opposed to the one-off creative spaces in a traditional building. I don't really see this changing. The entrepreneurs in real estate that are going out and building those projects and committing to the design upfront will find Orange County's visionary entrepreneurs committing to their projects.