NEWPORT BEACH, CA—Continued demand from technology companies for the newest, most-amenitized and most expensive buildings in the Orange County market is to be expected in 2018, CBRE first VP Allison Kelly tells GlobeSt.com. According to a recent tech report from the firm, double-digit office-rent growth was achieved in 13 US markets over the past two years, led by Orange County with 23%. It was buoyed by tech employment in the OC, which increased 40.7% from 2015 to 2016, making tech the top-growing industry in Orange County.
We spoke with Kelly about the market's position on technology and how it will play out in 2018.
GlobeSt.com: What is Orange County's position on the tech market?
Kelly: Orange County is very well positioned to continue to grow as an area for technology companies to locate. This is primarily due to the highly educated workforce, extensive housing options and exceptional quality of life. We are already fortunate to have well-known technology companies here such as Broadcom, Google, Microsoft, Cylance, Microsemi, Blizzard Entertainment and many more. Orange County also boasts a tremendous number of medical-technology firms – some of the recent transactions in this category include Vyaire for 180,000 square feet in the Irvine Spectrum and MicroVention, a Terumo Corp. company, for 205,000 square feet in Aliso Viejo.
GlobeSt.com: In which areas of tech does Orange County hold strength from a real estate perspective?
Kelly: As evidenced in the firms mentioned above: software, online platforms, gaming and entertainment as well as medical-technology firms hold great strength in this region.
GlobeSt.com: What do you expect to see with regard to tech tenants in this market in 2018?
Kelly: I expect to see continued demand and many of these companies choosing to locate into the newest, most amenitized (and most expensive) buildings in our market. These would include FivePoint's Gateway and Irvine Co.'s the Quad and 400 Spectrum Center in South Orange County as well as Trammell Crow's the Boardwalk and Lincoln Property Co.'s FLIGHT in the Airport Area. I also see further momentum in the South Orange County market—there are currently +/- 25,000 new homes under construction or planned in South Orange County, which will continue to enhance the demographic in this submarket—major companies such as Broadcom, CoreLogic, Cylance, MicroVention, MicroSemi, Send Grid and Vyaire (all in the tech space) have chosen to relocate to South Orange County from other parts of Orange County.
GlobeSt.com: What else should our readers take away about Orange County from this Tech 30 report?
Kelly: Tech is a lot of things today—not just startups or companies that are exclusively focused on software or gaming. Tech impacts how we shop, how we do business, how we do finances, how we interact. Companies that don't appear to be tech, based on their name or the industry they are in, still fall into this category as far as the types of people they are hiring: computer engineers, programmers, etc. Take loanDepot, for example. It is a major financial services company in our market that has focused more and more on its software applications, mobile apps and such to enhance its customer experience, transparency of comparing financing options, etc. In that way, tech has infiltrated many different industries, and in that it has a much broader implication on people, real estate and a region.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
