The Office Market Is Fluorishing In The OC
There is more of an emphasis being placed on office these days, which, coupled with the healthy market, means this year is a promising one in the OC.
Tenants are willing to pay higher rents to get the space they want, according to Stillwater Investment Group president John Drachman.
Companies are putting a greater emphasis on their office environments and using them as a way to attract clients.
"We've seen tenants willing to pay to attract top-tier employees," Harbor Associates principal Paul Miszkowicz said.
An increasing number of tenants seem to be attracted to creative space.
The OC is also enjoying a low unemployment rate of 3%, Allen Matkins partner Sandy Jacobson said.
The Koll Co. principal Scott Lanni said there is a difference between creative office and collaborative office.
Creative office costs a lot to build out, according to Lanni. Rents can be around $4.50/SF to $5/SF. Collaborative office consists of more open space and more money put into the common areas and amenities.
Creative office has been slower to take off in the OC compared to LA, he said.
"But we're paying attention to it, and the demand is headed in that direction," Lanni said.
Rental rates are still very reasonable in Orange County compared to LA, San Francisco, Seattle and other areas. That is especially true when looking at the quality of life in the OC and the quality of space available, Drachman said.
Over the last year, the OC has had aggressive rent growth, according to Miszkowicz.
He thinks there will be a deceleration in the pace of rent growth but expects to see healthy rent gains in the future.