Orange County is the third most populous county in California behind Los Angeles and San Diego counties. Encompassing more than 790 square miles, Orange County is home to more than three million people and ranks as the sixth-largest county in the United States. Thirty-four incorporated cities comprise Orange County, of which Santa Ana is the county seat. With most of its cities being founded and incorporated in the past century, Orange County is a newer region with many developing communities and a diverse ethnic base.
Located directly south of Los Angeles County, Orange County is home to major businesses, international trade, technology, culture, higher-education, sports, tourism, and world-renowned entertainment. Six Fortune 500 companies are headquartered in Orange County, with many on CNN Money’s Fastest Growing Companies list. Additionally, small businesses are a key component of the business landscape. Collectively, Orange County is the nation’s 15th top producing economy in the U.S. with a gross metropolitan product (GMP) of more than $191 billion, ranking the area 45th in the world.
Eleven independent universities call Orange County home, including, University of California at Irvine, Chapman University, and Cal State University at Fullerton. Some 36% of residents aged 25-plus hold a four-year bachelor’s degree or higher.
World-renowned attractions such as Disneyland, Knotts Berry Farm, the Honda Center, Angels Stadium, and the many coastal beaches of Orange County contribute to the $8.7 billion in visitor spending and $550 million in tax dollars that the county receives annually.
Irvine ranked sixth on CNN Money’s Best Places to Live list in 2012. Overall, residents of Orange County enjoy a high quality of life, marked by a strong home ownership base, above-state-level household incomes, low crime rates, and strong scores in well-being indexes.
Orange County has an overall office market base of 113 million square feet (msf) across the five sub-sectors – North Orange County, Central Orange County, West Orange County, South Orange County, and Airport Area. The region has experienced positive net absorption trends with growing amounts of leasing activity. The high-technology sector continues to proliferate, as many start-up companies are growing in the region. In coming quarters, positive absorption should continue, and with few new deliveries in the pipeline to apply upward pressure on vacancy, the market will continue to stabilize. Investment should increase.
Orange County is home to major retail centers, including South Coast Plaza, Fashion Island, Irvine Spectrum, and Downtown Disney. Favorable climates, ideal geography, and a strong spending core have long characterized the region’s retail landscape.
The 246-msf industrial market base in Orange County is geographically ideal due to its close proximity to the neighboring counties of Southern California. The demand for high-quality industrial space in Orange County continues to tighten, as leasing activity increases in light of an economic recovery. The Orange County industrial market continued its path to recovery, posting a modest 4.50% vacancy rate. Both vacancy and availability continued their downward trend and displayed double-digit percentage drops compared to the third quarter of 2011. Lease rates continued their upward trend, with the first quarter of 2011 marking the lowest rates of the recession. Net absorption posted nearly 5 million square feet of positive absorption from the second quarter of 2010 to the third quarter of 2012. While these are positive indicators, we are keeping a close eye on demand, which, being ultimately influenced by employment and overall economic stability, will need to be sustained in coming quarters for the Orange County industrial market to continue its pace of recovery.