Leasing activity slows in the fourth quarter as overall market activity remains low

In the fourth quarter 2023, Orange County office leasing activity recorded 1.5 million square feet (msf), a 16% decrease recorded last quarter and a 1.0% increase recorded from one year ago. Much of this quarter's deal volume stemmed from deals signed in the Business Services sector. Although there was a lack of larger 100,000-square foot-plus deals signed in Q4, deal volume in the 20,000-square-foot range was strongest. Macroeconomic concerns, high inflation, and year end business performances resulted in many occupiers taking a wait-and-see approach which has led to a slowdown in office space demand. Many tenants are continuing to downsizing square footages and/or subleasing their existing office space while landlords remain aggressive to preserving occupancy.

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