Kidder Mathews’ Research: Mixed Returns from Post-Pandemic Office Work in O.C.
The pandemic is waning (knocks on wood), masks are staying on faces at fewer places … and employers are signaling a return to the office. The uptick in work-from-here, hybrid approaches are expected to start rolling en masse in April.
Kidder Mathews – the largest independent CRE firm on the West Coast – has collected some Orange County-centric numbers about the Great Office Return* – and then they crunched those numbers. Here are some key takeaways:
Direct vacancy levels increased to 11.6 percent in Q1-2022, an increase of 5.2 percent year-over-year
Available sublease space totaled 3,438,710 square feet in Q1-2022
Average asking rates remained stagnant at $2.73 per square foot, on a full-service basis
After reporting positive gains in Q4-2021, direct net absorption fell back into the red, reporting negative 368,385 square feet
Leasing activity continued its momentum with over 2 million square feet being leased in the first quarter as landlords remain aggressive with pricing and offer more concessions to capture tenants
Prologis, a real estate investment trust that primarily invests in warehouses, recently purchased Pacific Vista, a five-building office campus in Lake Forest for $96 million
Orange County’s labor market declined by 29,100 jobs between December 2021 and January 2022
Countywide unemployment increased to 4.2 percent as of January 2022 – an uptick of 0.5 percent from the prior month
Source: CoStar, EDD, OCBJ
Kidder Mathews Director of Research Gary Baragona, 415.229.8888