Dienstag: The Airport Area and South County submarkets have definitely experienced the highest rent growth since the recovery began. Since the end of 2012, the Airport Area monthly average asking rent has grown 53.8% to $3.06 per square foot, full service gross. During that same time period, South County's average rent has increased 50% to $2.79. Meanwhile, the overall Orange County market has recorded rent growth of 37.7% to $2.70.

Rent growth is most prevalent in these areas because demand for office space has been highest in the Airport Area and South County; greater tenant activity brings higher increases in rent. Also, the majority of the new development and creative conversions have occurred in these two submarkets, which include 520 Newport Center, 200 Spectrum Center, Sand Canyon Business Center, Hive and Intersect. These types of properties have higher rents which places upward pressure on the submarket averages.

GlobeSt.com: Which submarkets are emerging stronger than they have been in the past?

Dienstag: The Airport Area has surpassed the previous peak of 2007 and South County has reached its 2007 peak. Buildings currently under construction such as he Boardwalk, 400 Spectrum Center and the Bridges will push rents up. These two submarkets have the most sought-after office properties and they also have the most desirable retail amenities to attract high-profile tenants. The Central, North and West County submarkets have more room for additional growth since their rent recovery is slower than the other submarkets; however, as some tenants get priced out of the Airport Area and South County, they are turning their attention to more-affordable office submarkets.

GlobeSt.com: What factors could turn the tables on rent growth in certain OC submarkets?

Dienstag: Rent growth is dependent on demand, and positive demand is dependent on job growth and the health of the economy. According to the BLS and EDD's most recent jobs report, Orange County's unemployment rate of 3.7% is below the rate from 12 months ago, which stood at 4.2%. Over the last 12 months, Orange County has recorded 1.5% job growth. When companies increase staff count, then more office space is needed. If job growth stops, then demand decreases, which can slow rent growth. Also, mergers and acquisitions that result in Orange County firms laying employees off and therefore reducing office space is a factor to watch. Additionally, office density is increasing as companies are adopting more-efficient space layouts which is reducing the amount of square feet allocated per employee. Pre-recession, the average square feet per employee was 300; this has decreased to a current average of 200 square feet, and many companies are targeting 150 square feet (and some even lower).

GlobeSt.com: What else should our readers know about OC's office submarkets in terms of rent growth?

Dienstag: Prior to the recession, the Orange County economy was heavily influenced by financial-services firms, most notably mortgage companies. The current economy has become significantly more diversified, led by the technology, healthcare and life-sciences industries. By having a strong economic base, the Orange County office market is well-positioned to find demand from multiple sectors. The greater opportunity for positive demand, the greater opportunity for rent growth.

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IRVINE, CA—If job growth stops in Orange County, then demand decreases, which can slow office rent growth. Also, M&A activity that results in layoffs reduces office-space demand, JLL senior research analyst Jared Dienstag tells GlobeSt.com. According to a recent report from the firm comparing office rent growth in various Orange County submarkets since 2010, in addition to leading Orange County's rent growth, strong job growth from startups and mature companies is a key factor in driving the demand for office space in the market.

The report also showed that the Airport Area surpassed 2007's peak average asking monthly rental rate ($3.02 per square foot, full service gross) in Q4 2016 with a rent of $3.06 per square foot. Although West County recorded the lowest rent growth since 2010, the submarket is not as susceptible to cyclical fluctuations as most other submarkets. The current average rent for the total Orange County market of $2.68 per square foot is only 2.2% off the 2007 peak rent of $2.74 per square foot.

We spoke with Dienstag about the reasons behind rent-growth numbers in various submarkets and what factors could turn the tables on this growth.

GlobeSt.com: Which OC office submarkets are faring the best with regard to rent growth, and why?

Dienstag: The Airport Area and South County submarkets have definitely experienced the highest rent growth since the recovery began. Since the end of 2012, the Airport Area monthly average asking rent has grown 53.8% to $3.06 per square foot, full service gross. During that same time period, South County's average rent has increased 50% to $2.79. Meanwhile, the overall Orange County market has recorded rent growth of 37.7% to $2.70.

Rent growth is most prevalent in these areas because demand for office space has been highest in the Airport Area and South County; greater tenant activity brings higher increases in rent. Also, the majority of the new development and creative conversions have occurred in these two submarkets, which include 520 Newport Center, 200 Spectrum Center, Sand Canyon Business Center, Hive and Intersect. These types of properties have higher rents which places upward pressure on the submarket averages.

GlobeSt.com: Which submarkets are emerging stronger than they have been in the past?

Dienstag: The Airport Area has surpassed the previous peak of 2007 and South County has reached its 2007 peak. Buildings currently under construction such as he Boardwalk, 400 Spectrum Center and the Bridges will push rents up. These two submarkets have the most sought-after office properties and they also have the most desirable retail amenities to attract high-profile tenants. The Central, North and West County submarkets have more room for additional growth since their rent recovery is slower than the other submarkets; however, as some tenants get priced out of the Airport Area and South County, they are turning their attention to more-affordable office submarkets.

GlobeSt.com: What factors could turn the tables on rent growth in certain OC submarkets?

Dienstag: Rent growth is dependent on demand, and positive demand is dependent on job growth and the health of the economy. According to the BLS and EDD's most recent jobs report, Orange County's unemployment rate of 3.7% is below the rate from 12 months ago, which stood at 4.2%. Over the last 12 months, Orange County has recorded 1.5% job growth. When companies increase staff count, then more office space is needed. If job growth stops, then demand decreases, which can slow rent growth. Also, mergers and acquisitions that result in Orange County firms laying employees off and therefore reducing office space is a factor to watch. Additionally, office density is increasing as companies are adopting more-efficient space layouts which is reducing the amount of square feet allocated per employee. Pre-recession, the average square feet per employee was 300; this has decreased to a current average of 200 square feet, and many companies are targeting 150 square feet (and some even lower).

GlobeSt.com: What else should our readers know about OC's office submarkets in terms of rent growth?

Dienstag: Prior to the recession, the Orange County economy was heavily influenced by financial-services firms, most notably mortgage companies. The current economy has become significantly more diversified, led by the technology, healthcare and life-sciences industries. By having a strong economic base, the Orange County office market is well-positioned to find demand from multiple sectors. The greater opportunity for positive demand, the greater opportunity for rent growth.