The office market in Orange County held up in the second quarter. According to a new report from JLL, the local office vacancy rate remained flat at 13.9% and asking rents remained flat at $3.11 per square foot. Absorption rates also remained flat but negative at -381,042 square feet. The market performance was better than most expected, but also a sign that the worst could still be yet to come.

"The market doesn't react very fast," Jeff Ingham, senior managing director at JLL, tells GlobeSt.com. "There was some negative net absorption and rental rates remained flat, but it wasn't crazy negative. It wasn't nearly as bad as it was in 2008. That doesn't mean that it isn't going to change in the future, but the reality is that it is too early to tell. We are in the first inning of this, and it is still too early to know where it is going to go."

Looking at rents, Ingham said the market typically needs to see a change in tenant behavior and activity before a change in rental rates, and that takes times. "Rental rates are still pretty flat, but to see a rental rate change, the market needs to test the availability and tenant requirements," he says. "It needs to be competitive for rental rates to really drop. Rental rates are based on asking prices, and there is quite a bit of new construction. New construction is going to be at a higher price. As things shape up, the market will act and react based on the competition and demand."