The office market in Orange County, California, saw further improvement in the third quarter, supported by a series of diversified corporate leases. The overall vacancy rate dropped to 15.4 per cent, down from 17.1 per cent in the previous year. Concurrently, average asking rents rose to $3.02 per square foot per month, compared to $2.90 at the end of 2025.
These data from JLL show that while net absorption for the quarter slightly decreased, it remained positive on a year-on-year basis at 265,394 square feet. This contrasts with a negative net absorption of 158,099 square feet for the entirety of 2025. Tenants signed leases for approximately 1.55 million square feet over the quarter.
Extensive Leases and Market Developments
Leasing activity was led by Taco Bell's 254,162 square foot lease at The Irvine Company's Alton HQ. This is the largest office lease signed in Orange County in the past five years. Taco Bell plans to relocate its current headquarters in Irvine in 2028.
Other significant deals included medical technology manufacturer Envista Holdings, which leased 101,800 square feet across three buildings. An unnamed aerospace company also secured 173,057 square feet across two properties in the airport area, including 102,417 square feet at 4000 MacArthur Boulevard.
The South County submarket recorded the strongest quarterly absorption with 86,107 square feet, with The Irvine Company's Irvine Spectrum Campus contributing 133,115 square feet. Despite this positive development, some other submarkets experienced absorption losses. Supply remains constrained as no new office space has been completed in Orange County this year to date.
Projects and Supply Shortage
Currently, only one project is under construction: the 168,137 square foot building within the Anaheim Ducks' $5 billion mixed-use development. Completion of this project is expected in the fourth quarter, with 23 per cent of the space already pre-leased. Additionally, the conversion of office space to other uses contributes to the reduction of supply in the market.
