ORANGE COUNTY, CA—The statistical leverage shift from the tenant to the landlord is clearly the story of 2015 in the office market, Savills Studley's EVP Royce Sharf tells GlobeSt.com. We spoke exclusively with Sharf about the changes he's seen in the sector during this year and what next year looks like for the office market.

GlobeSt.com: What were the greatest changes you saw in the office market during 2015?

Sharf: Clearly, the story of 2015 was the statistical leverage shift from the tenant to the landlord. There is a palpable sense that we will see continued rent growth until additional development is underway. This has created a sense of urgency amongst tenants to expedite their transactional decision making.

GlobeSt.com: Where do you see office vacancy heading in 2016?

Sharf: Barring any unforeseen shift in the local economy, it is statistically likely that the vacancy rate will continue to drop in 2016. With the exception of the Irvine Co., all other speculative office developers in Orange County have yet to turn a shovel and commence the physical construction of new office projects.

GlobeSt.com: What do you expect to happen with office development next year?

Sharf: I expect that we will see the resurgence of speculative office development for the first time in almost a decade. Trammell Crow has announced that they will start construction on its Boardwalk project, and Lincoln Properties intends to start the first phase of its Flight project. In addition to repositioning the former Quintana campus into the Intersect project, it is possible that Hines will also move forward with the development of the 17850 Von Karman tower. In addition, I suspect that the Irvine Co. will continue its bullish position and kick off the next generation of mid-rise office product in the Spectrum. It is also likely that the firm may even start on the construction of 400 Spectrum Center, the sister building to its newest class-A tower, 200 Spectrum Center. These offerings, coupled with some realistic build-to-suit alternatives for the larger user, will provide interesting occupancy alternatives for Orange County tenants.

GlobeSt.com: What else can we expect from the office sector in 2016?

Sharf: The creative-office trend is here to stay. We are seeing increased demand for this product type across our client base. You will see a continuation of the effort to repurpose existing assets into cutting-edge space. In addition to Hines' Intersect project mentioned above, this effort is being led by Bixby Land Co., which is enjoying very positive reviews since the delivery of its recent Avalon and 33.7 North projects.