Jerry Holdner, Voit Commercial Tenant Solutions Real Estate Market Research Analyst, commenting on how the Orange County commercial real estate market is readjusting in terms of lease rates and sale prices…
ORANGE COUNTY, CA-The county’s office market continued to post negative net absorption during the second quarter, but the bid-ask gap narrowed on investment deals, as illustrated by closings of some large sales in the quarter, according to a new report from Newport Beach-based Voit Real Estate Services. Jerry Holdner, vice president of market research for Voit, tells GlobeSt.com that the bid-ask gap on investment sales “appears to be diminishing,” as illustrated by office investment sales of $160 million and $73 million during the quarter, along with another large sale at an undisclosed price.
Voit’s report showed 676,000 square feet of negative net absorption in the second quarter, for a total of 1.5 million square feet of negative absorption for the year, which the report attributed to job losses that have reduced demand for office space not only in Orange County but in markets throughout the US. As demand has weakened, rents have declined, and the average asking rate for office space in Orange County now stands at $2.29, down 48 cents from the record high rate of $2.77 in the fourth quarter of 2008.
Holdner tells GlobeSt.com that office leases are being signed at rents closer to asking rates than they were two years ago, when rents first began to slide. Landlords were reluctant to lower their published asking rates then, but the deals were being done at significantly below asking rates, so the asked-for rents now more closely reflect actual rates. Asking rents now are at about the same level as 2005, Holdner says…Click HERE to view the full article.
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