Leasing activity slows as office space demand is driven by lease expirations and renewals

In the first quarter 2024, Orange County office leasing activity recorded 1.3 million square feet (msf), a 7% decrease recorded over last quarter and a 23% increase recorded from one year ago. Much of this quarter’s deal volume stemmed from deals signed in the Financial Services sector. Although there was a lack of larger leases over 100,000 square feet (sf) in Q1, deal volume in the 30,000- square-foot range was strong. Occupiers continue to take a waitand-see approach which has led to a slowdown in office space demand, especially with office-using employment growth turning negative over the past year. For 2024, expect many tenants to continue downsizing and rightsizing while landlords remain aggressive at preserving occupancy.

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