Office / Industrial Pre-Summer Market Update
Leasing
Office Leasing - Los Angeles ranks fourth nationally for office rents at $3.31 per square foot, trailing San Francisco, San Jose, and New York. Orange County remains attractive for companies seeking value in established business districts. The UCI Applied Innovation Center expansion of 84,000 square feet represents a significant development in Irvine Company University Research Park. Market conditions show softening in both Class A and Class B office properties.
Industrial Leasing - The Inland Empire has 22.7 million square feet of space under construction. Los Angeles maintains a 2.5% vacancy rate, while Orange County's industrial rents average $1.11 per square foot—the sixth highest in the nation. The former J.C. Penney distribution center in Buena Park, spanning 1.1 million square feet, is now available for lease. Despite substantial new construction, warehouse relocation opportunities remain limited; successful relocations require planning 3-6 months ahead of typical timelines.
Sales / Development
Office Development - Discovery Park and Spectrum Terrace represent the largest new deliveries, totaling over 1.5 million square feet of Class A office space. Currently one-third complete, these projects will phase in remaining inventory over 2-3 years, potentially bringing 7,500 new employees to the area. Both feature "floor to ceiling glass, outdoor meeting area, dedicated conference space, high end dining, and athletic/health oriented amenities."
Industrial Sales - An Albertsons distribution center (1 million square feet) adjacent to El Toro Marine Base is available through a 45-year sale-leaseback, potentially representing Orange County's largest deal this year. Prologis recently purchased over 600,000 square feet of Class A warehouse space in Fullerton and Brea.
Investment
Wealth Creation Strategies - Cost segregation allows property components to depreciate individually rather than under a single schedule, creating tax efficiency opportunities for real estate investors. Current investor focus centers on single-tenant net-leased properties and multi-tenant industrial assets.