Mortgage Tenants Still Critical to OC Office
Although Orange County’s economy has diversified since the recession, JLL SVP Curtis Ellmore (who focuses on tenant rep) tells us it's still heavily tied to the mortgage industry. JLL research shows that in the county’s CBDs, 14.1% of office space is occupied by financial services firms, while it's 12.5% in the suburbs. The volatility of the mortgage industry, Curtis says, motivates companies to seek as much flexibility as possible in their lease agreements.
Mortgage companies in particular are volatile, with the industry in a declining/transition phase. Business fueled by refi and ultra-low interest rates has come and gone. (All that's left are stories of low rates and a selfie we took with our deed.) Origination, not refi, is now driving the business. “Two years ago, we saw a lot of growth in the industry, but today that growth has ceased,” Curtis says. For example, Cash Call is working to downsize its 400k SF OC footprint by more than half.