Key Takeaways
- • Orange County office demand is shifting toward large blocks, with tenant requirements for 100,000+ square feet exceeding current large-block availability, according to JLL's Billy Shaw.
- • Newmark reported record average asking rents of $3.04 per square foot in Q3 2026, with sublease availability falling to 1.9% of inventory, its lowest level since 2015.
- • Savills recorded approximately 2.1 million square feet of leasing signings in Q3 2026, up 59.7% from Q2 and 44.6% year-over-year.
- • Cushman & Wakefield reported a 14.2% Q3 vacancy rate, down 280 basis points year-over-year, though quarterly absorption was modestly negative.
- • Only 12 contiguous office blocks of 50,000+ square feet exist in the market, with six in Irvine Spectrum, and aerospace and defense are leading large-block demand.
Summary
Companies are again taking large blocks of office space in Orange County, California, reversing a pandemic-era trend that favored smaller suites as hybrid work took hold. According to JLL, nearly 10 million square feet of county office space has been converted, demolished or slated for redevelopment since the pandemic, and only 12 contiguous office blocks of 50,000+ square feet remain, six of them in Irvine Spectrum. Billy Shaw, associate at JLL, told GlobeSt.com that large-block requirements are the highest in years, led by aerospace and defense and supported by a healthier economy. Taco Bell's 254,000-square-foot lease at its Alton headquarters was the largest Orange County lease in five years.
Available large blocks are concentrated in South County and the Airport Area. Irvine Spectrum offers six blocks totaling about 611,000 square feet, Irvine/Tustin Legacy has four blocks totaling about 453,000 square feet, and Costa Mesa has two blocks totaling about 122,000 square feet. More than eight tenants are seeking 100,000+ square feet, with combined requirements exceeding 1.2 million square feet. Shaw noted that many pandemic-era short-term leases are expiring, leaving tenants displaced by redevelopment competing for the same Class A buildings, which gives landlords more leverage than they have had in years. OC Vibe is the only office building under construction, with about 168,000 square feet available and estimated completion in Q4 2026.
Newmark's third-quarter 2026 report described a meaningful recovery across occupancy, leasing and rents, with record average asking rents of $3.04 per square foot. Savills reported approximately 2.1 million square feet of Q3 signings. Notable transactions included Envista Holdings' 117,802-square-foot relocation in Irvine Spectrum and Anduril Industries' 102,000-square-foot lease in the Airport Area. Newmark reported positive net absorption of about 1.2 million square feet through the first nine months of 2026.
Challenges remain. Cushman & Wakefield reported a 14.2% vacancy rate in Q3, with modestly negative quarterly absorption, although vacancy fell 280 basis points year-over-year. Class A properties continued to attract tenants while Class B buildings lost occupancy. Older buildings and less competitive locations still face leasing difficulties, and market conditions remain uneven across property classes and submarkets.
Available large blocks are concentrated in South County and the Airport Area. Irvine Spectrum offers six blocks totaling about 611,000 square feet, Irvine/Tustin Legacy has four blocks totaling about 453,000 square feet, and Costa Mesa has two blocks totaling about 122,000 square feet. More than eight tenants are seeking 100,000+ square feet, with combined requirements exceeding 1.2 million square feet. Shaw noted that many pandemic-era short-term leases are expiring, leaving tenants displaced by redevelopment competing for the same Class A buildings, which gives landlords more leverage than they have had in years. OC Vibe is the only office building under construction, with about 168,000 square feet available and estimated completion in Q4 2026.
Newmark's third-quarter 2026 report described a meaningful recovery across occupancy, leasing and rents, with record average asking rents of $3.04 per square foot. Savills reported approximately 2.1 million square feet of Q3 signings. Notable transactions included Envista Holdings' 117,802-square-foot relocation in Irvine Spectrum and Anduril Industries' 102,000-square-foot lease in the Airport Area. Newmark reported positive net absorption of about 1.2 million square feet through the first nine months of 2026.
Challenges remain. Cushman & Wakefield reported a 14.2% vacancy rate in Q3, with modestly negative quarterly absorption, although vacancy fell 280 basis points year-over-year. Class A properties continued to attract tenants while Class B buildings lost occupancy. Older buildings and less competitive locations still face leasing difficulties, and market conditions remain uneven across property classes and submarkets.
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