Set aside the gloom and doom news you might have heard about California’s economic woes in this post-pandemic world. Many experts actually believe California is in for a robust few years ahead, and the state and country continue to recover from the pandemic. While the pandemic certainly had reared its ugly head in many ways, including for the Orange County commercial real estate market, things are rebounding.
Orange County is one of the world’s most recognizable counties, and as such, this big piece of Southern California real estate naturally attracts experienced people in business and investors. With their real estate investing, these people will bring Orange County back to its pre-pandemic status.
Get to know what Orange County has to offer and the types of commercial real estate Orange County has. Read on to learn more about some of the Orange County commercial real estate market trends.
Higher Than Normal Office Vacancies
In the pandemic world, the social distancing and lockdowns forced office buildings to go dark and workers to break open the computer at the kitchen table instead.
It’s probably not surprising to hear the office real estate in Orange County hit record-high vacancies. In fact, it had been almost a decade since that much commercial real estate sat vacant in Orange County.
Very slowly, Orange County office space usage is seeing a return to some form of normalcy like before the pandemic. Companies are slowly bringing workers back into the office from working at home.
This means that office space that has sat empty is seeing a shifting trend. It’s slowly filling back up with workers and businesses.
This is not happening quickly but as a slow decline in vacancies in the commercial office market.
High Vacancy Rates on High-Value Commercial Sites
The high-volume sites are one type of commercial real estate that seems to continue with high vacancy rates. Businesses are not coming back to the big open office space found in towers like they once were before the pandemic.
Orange County is seeing many large tower offices with higher-vacancy rates. It’s a twofold reason businesses are running back to those big office spaces:
- A shift away from large, open-plan offices
The market identifies these four and five-star properties as beautiful, luxurious, and even spacious, Yet, they simply cost more than some other options.
As business recover from the pandemic slowdowns they weathered, they aren’t quite ready to opt for these higher-rent options.
The other reality is that their workers are excited to return to big office spaces with open walls and many co-workers around them.
The market is seeing a slow and steady rebound for the smaller, more compact office building spaces. Some experts believe that the market overbuilt the high-value sites, and there’s more than the demand requires for the area.
Leasing Market Inching Towards Pre-Pandemic Status
Post-pandemic, it appears that the commercial real estate market is slowly improving if you plan to lease the property. The market has not entirely rebounded but is showing steady and favorable improvements.
It’s worth noting that most experts believe the market may have hit a bit of a plate on leasing, though.
Some experts suggest the challenges in measuring the lease growth for commercial properties. This is because while many businesses may have leases, there is a high volume of releasing between businesses.
Companies don’t want offices they’ve leased sitting empty if they have workers who aren’t returning. Instead, they are opting to sublease the property to avoid a loss.
Reduced Levels on Commercial Construction Sites
Interestingly, the commercial construction market is not rebounding as the leasing and buying markets have. While some new commercial construction has resumed in Orange County, it’s far from pre-pandemic levels.
It could be that the construction community recognizes the abundance of empty pre-existing real estate. They could also recognize an overzealous amount of building done pre-pandemic.
Either way, commercial real estate construction is only building at a rate of about half what they were doing before the pandemic. Experts believe it will take much longer for the commercial construction market to rebound fully compared to the leasing and buying property markets.
Commercial Property Sales
Commercial property sales trends come with a mixed bag of results, some good and some less favorable results.
Real estate investors are back to buying commercial property in Orange County but not at the same volume the real estate market had seen before the pandemic. That’s the less favorable trend.
However, the good news is that the value of commercial property sales is actually significantly higher than in previous years.
So, while fewer commercial properties are being sold, the ones selling are going at a much higher rate than in previous years.
Interested in Orange County Commercial Real Estate?
Whether you’re in the market to lease a commercial property or buy property, you need an expert who can guide you through the process.
If you’re ready to make a move in the commercial market, then you need to work with a commercial real estate expert who can assist you to get the right property for your business needs.
Whether you need help defining what kind of space your business needs or assistance narrowing down the best property that checks off all of your needs, a commercial real estate specialist can help you find the right commercial property for you.
Real Estate Trends in Orange County, California
There’s no question that the pandemic was highly impactful on the Orange County commercial real estate market. The good news is that as California recovers from the pandemic, the trends show the commercial real estate market following suit.
If you’re looking for commercial property in Orange County, whether to buy or rent, we can help. Let us help you find the right property for your business. Contact us today or call us call us at (877) 775-9625 for all your commercial real estate need, so we can get started working together.