Leasing activity ticks up in the third quarter but overall market activity remains low

In the third quarter 2023, Orange County office leasing activity recorded 1.9 million square feet (msf), a 23% increase from the 1.5 msf recorded last quarter. Much of this volume stemmed from deals signed in the TAMI and Business Services sectors, respectively. Although there was a lack of larger 100,000 square feet (sf) deals signed in Q3, deal volume in the 20,000 sf range increased. Macroeconomic concerns, higher inflation, and a slowdown in hiring have continued to result in most occupiers taking a wait-and-see approach which has led to a slowdown in office space demand relative to pre-pandemic. 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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