Ingham: "Yes, they're reducing their footprints, but not as much as people think."

IRVINE, CA—Despite Orange County office deliveries expected to reach close to 600,000 square feet in 2016 and 2.2 million square feet in 2017, completions won't all come at once, helping absorption to catch up, JLL's senior managing director Jeff Ingham tells GlobeSt.com. The firm's Q4 office report revealed that despite the market recording a slightly negative net absorption during the quarter of -114,776 square feet, 2015 was the fifth consecutive year that experienced annual positive net absorption. Also, total office vacancy has reached 11.8%, the lowest since 2007. We spoke exclusively with Ingham about the relationship between office vacancy, the expected deliveries in the near future and absorption in the market.

GlobeSt.com: What is the relationship between Orange County having the lowest office vacancy rate since 2007 and the ramping up of deliveries between now and the end of next year? How will all these deliveries affect vacancy?

Ingham: Obviously, we will have an increase in vacancy. But right now, we're tracking quite a few tenants that are looking for more space. There are companies moving from existing space they own to new space that's not currently vacant. Emulex purchased last year and recently sold their headquarters, so they have two buildings vacant on their campus, which added to the vacancy and negative absorption. There's also lot of vacancy in existing buildings, not only from new buildings coming out of the ground. For example, the WaMu building, which is 400,000 square feet, has been vacant for seven years, and 2 MacArthur has also been vacant for several years. Vacancy is still over and above the 11% mark, which is not ideal for building new buildings, but the new deliveries that are coming on board are in a relatively controlled delivery system right now. The Irvine Co. has the financial wherewithal to move tenants from one building to another, so there's good activity there. The new delivery system will keep the market in check.