Landlords Boost Office Rents as Vacancy Rates Post Steep Drop

Owners, developers and brokers of office space are loving the county’s low vacancy rate.

Tenants hate it.

Brokers expect Orange County’s 7% office vacancy rate to fall further in coming months.

Low vacancies have led to rents shooting up 10% or more in some areas of the county during the past year,good for landlords, bad for tenants.

Meanwhile, current and expected rate hikes are supporting hefty prices of buildings for sale, brokers said.

Vacancies could fall further as a result of limited new office construction amid strong demand for office space, brokers said.

Several high-rise office buildings are planned. The high cost to build a tower may keep some from hitting the market for several years, brokers said.

Taken together, all the companies that are presently looking to lease space in the county need a total of 8 million square feet, according to Scott Johnstone, senior vice president with Grubb