Smaller lease transactions drive office demand amid leasing slowdown

In the first quarter 2025, a significant portion of deal volume was driven by smaller lease transactions, with most top leases under 30,000 square feet (sf). Overall office leasing activity in Orange County was 1.2 million square feet (msf), marking a 17.2% decrease from the previous quarter and a 10.2% decrease compared to a year ago. Despite this slowdown in leasing activity, office demand is expected to improve due to positive office return rates as Irvine return to office was 67% of January 2020 levels according to Placer Al.

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