Weekly Move Coincides With Huge Drop in OC Office Rental Market
Should anyone be wondering, "Hey, isn't 2975 Red Hill Ave., Suite 150, Costa Mesa, CA 92626 extremely close to the Weekly's birthplace in a single-story office park at Red Hill and Kalmus?" the answer is, sho' nuff.
But phone numbers will stay the same.
So why, in these dark economic times, is this a fortuitous time to move? Because Orange County office rentals have sunk to 2006 levels, according to a report in the GlobeSt.com real estate website. Citing figures from Voit Commercial Brokerage, GlobeSt.com reports the average asking rate for office space here dropped to $2.47 per square foot in the fourth quarter after peaking at $2.77 in 2007, the second straight year of negative net absorption. The county's office market began to weaken when subprime mortgage companies vacated huge blocks of space in early 2007 and has just gotten progressively worse amid the recession and financial industry meltdown.
Voit's year-end figures show the vacancy rate finished the year at 15.18 percent, an increase over last year's fourth-quarter rate of 12.27 percent. The total amount of space available in the county's roughly 108-million-square-foot office market, including direct and sublease space, is at 21.83 percent compared with last year's 17.07 percent.
Jerry Holdner, Voit's vice president of market research, expects lease rates to remain at current levels for the short run, with concessions increasing in the forms of free rent, reduced parking fees, relocation funds and tenant improvement allowances. Some landlords are also offering the furniture left behind by failed financial services companies that have vacated their spaces.
So one company's failure can be another company's filing cabinet. Better hurry while the gettin's good!