Leasing activity picks up in the second quarter while overall market activity flattens

In the second quarter 2023, the Orange County office leasing activity recorded 1.5 million square feet (ms), an 39% increase from the 1.1 msf recorded last quarter. Much of this increase stemmed from deals signed in the healthcare and TAMI industries. Of the top ten leases signed in the second quarter, just one lease was a renewal which was quite a change from the six renewals signed last quarter. Despite the increase in leasing activity, macroeconomic concerns such as recession fears, increasing interest rates, and a slowdown in hiring have caused occupiers to have a wait-and-see approach which has led to a slowdown in office space demand. This has also led to many tenants downsizing square footages and/or subleasing their existing office space while landlords remain aggressive to preserving occupancy.

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